Disney may be interested in acquiring Epic Games at some point, it’s claimed

Disney may be considering an attempt to acquire Epic Games in the future, with senior executives reportedly divided on whether to pursue it, according to a veteran tech reporter.

Disney and Epic have a longstanding working relationship – the latter has contributed Unreal Engine technology to various Disney theme park rides and Star Wars movies, for example, while Fortnite has played home to numerous Disney season collaborations and live events, including Marvel and Star Wars themed ones.

Back in February 2024, The Walt Disney Company also announced that it was making a $1.5 billion investment to acquire an equity stake in Epic Games, which would include the creation of a new persistent “games and entertainment universe” connected to Fortnite.

This could one day extend to acquiring Epic outright, according to tech journalist and former Verge deputy editor Alex Heath, who recently appeared on podcast The Town with Matt Belloni to discuss a number of tech topics including the current state of Epic Games, which reported last week that it was laying off more than 1,000 employees.

After Belloni said he had heard rumours that Disney wanted to buy Epic Games at some point, Heath stated that he knew of some senior members at Disney who are considering such a move.

“I know for a fact there are senior executives in Disney who want them to buy Epic and are just waiting for that moment,” Heath said. “And then there’s others who think it’s a bad idea.”

Belloni also claimed that new Disney CEO Josh D’Amaro, who took over from Bob Iger earlier this month, wasn’t keen on Disney’s $1 billion deal with Sora company OpenAI (which fell through last week) but “was 500% behind this Epic Games relationship that Disney has where they are developing an open world experience within Fortnite”.

Heath stated, then, that were Epic Games to ever be open to being acquired, Disney would be “the most natural home for it for a lot of reasons, for the park integration – can you imagine a Fortnite park – to all the open-world, you know, integrating Disney IP into it, which they’ve already announced, and also Disney’s gaming platform, and I can see that”.

“At the same time,” he added, “you have to understand Epic is a founder-controlled company so Tim Sweeney, the founder, has full voting stock control and can make unilateral decisions and it’s really up to him.”

Elsewhere in the discussion, Heath explained that while Epic recently reported a downturn in Fortnite engagement, it’s still one of the most popular forms of entertainment for young people today, which makes it an attractive prospect for Disney.

“Gaming in general is having a hard time,” he said, “but if you look at Roblox‘s growth, which is where Epic has been trying to take Fortnite into more of an open-world, creator first ecosystem where creators can build businesses building on top of Fortnite, Roblox is just killing it with that.

“And I think these experiences are probably still the future of not only gaming, but social media for young people, right? They’re hanging out in these worlds.”

“I’ve got a 10-year-old,” Belloni agreed. “He’s hanging out in Fortnite with his buddies… and he would be stoked if all of a sudden Tony Stark showed up, and Yoda and a bunch of Jedi and they could play with those.”

“It’s the best combination to potentially actually challenge Roblox’s dominance here,” Heath replied. “And you can call it gaming, but it’s really entertainment and it’s also social media. So yeah, Disney’s on the [capitalization] table, they’re supposed to be doing this integration [with Fortnite].”

Belloni then reiterated that new Disney CEO was keen on the relationship with Epic, because “he sees it as a lynchpin of the entire interactivity of Disney+, where if Disney+ becomes the portal into your entire Disney experience, including shopping, gaming, socialising and, you know, luxuriating in the Disney brand, then Fortnite is a part of that for sure.”

Heath also pointed out that outside of games, acquiring Epic would also mean acquiring Unreal Engine, which is increasingly being used for film and TV production including on shows such as The Mandalorian.

He then concluded by referring to Epic’s recent confirmation that it’s laying off more than 1,000 employees, saying: “Epic, I think, overhired in the pandemic. The reaction to gaming going through the roof when everyone was in lockdown, right? Like a lot of other companies.

“They don’t have the benefit of the rigor of being a public company like Roblox. and they’re also founder-controlled. So sometimes that leads to things like this where you have to pull things back.

“Epic’s not going away, but if Tim ever realizes ‘hey, this is just a slog on my own’, I mean, he’s already a billionaire multiple times over, so it’s hard to know where his incentives lie here. But I think he wants the company to be a thing that lasts way beyond him, and he has big ideas about technology and platforms in the future.

“And I think if he ever decided ‘look, I think it’s better if I take a step back and and the company go to another home’, it would be Disney. I mean, there’s no question. I think Josh would want it. A lot of the executive team would want it. And the the deal would probably pay for itself, honestly, in the first day when they announced it in the stock price. I think investors would look at this and go ‘man, this is a great link-up, this is something that can actually challenge the tech platforms and Roblox’.”