Disney is teaming up with video game giant Epic Games, taking out a $1.5 billion minority stake in the company behind the smash hit “Fortnite”, CEO Bob Iger announced Wednesday.
In an interview with CNBC, Iger said the company’s bet is “our biggest foray into the games space ever.”
Disney will collaborate with Epic Games to create a “Disney universe for gaming, play, and watching,” Iger told CNBC.
Epic’s third-person shooter game “Fortnite” has generated revenue through microtransactions and crossovers with other IPs such as Dragon Ball, Stranger Things, and Family Guy.
After the markets closed on Wednesday, Disney disclosed that it exceeded profitability projections by decreasing streaming costs and “turned the corner and entered a new era for our company,” Iger wrote in an earnings report.
Disney joins other media giants, including Warner Bros., Discovery, and Netflix, in diversifying their revenue streams and leveraging their well-known franchises through gaming.
However, Disney and other legacy media companies have had mixed results with games. Analysts have questioned gaming’s capacity to compensate for legacy media’s linear TV industry, citing the time it takes to develop new high-production-value titles.