"Who is giving up sh*t?": Disney's $1.5 billion stake acquisition in Epic Games does not add up, here's why

The New York Times Dealbook Summit 2023 — Disney CEO Bob Iger (Image via Getty)

In a monumental move into the gaming realm, Disney is set to invest a staggering $1.5 billion for an equity stake in Epic Games, marking its most substantial venture into the gaming industry to date.

This strategic investment signals Disney's recognition of shifting demographic trends and aligns with the evolving preferences of younger audiences, who increasingly spend their time in the gaming space.

However, netizens of the internet have been quick to point out that the stake acquisition doesn’t add up. Reddit users posted about the current shareholders of Epic Games, and the speculation is that someone apart from Tim Sweeney has sold some or all of their shares to Disney.

Internet reactions to the Disney deal (Image via Reddit)

This has left many wondering who it was, with another user commenting:

“More or less than Sony is the question... We know that the majority owner won't dilute his stake to go below that (reasonably), so who's giving up sh*t?”

Disney's big bet in the gaming space

Disney's investment of $1.5 billion for an equity stake in Epic Games marks a significant leap into the gaming domain. Disney CEO Bob Iger highlighted the timeliness and importance of this move, considering the changing demographic trends and the preferences of younger generations.

Previous initiatives presented mixed results, including the Infoseek acquisition in 1998, the Club Penguin acquisition in 2005, and the Maker Studios purchase in 2014. In an interview with CNBC, Iger called the investment:

“Probably our biggest foray into the game space ever.”

Internet’s reaction to the deal

The partnership with Epic Games is set to extend beyond a financial investment, with both companies collaborating to develop new games and an expansive entertainment universe.

Reactions to this development on the internet are mixed, ranging from speculations regarding the valuation at which Disney is making the deal to Epic Games’ other shareholders’ moves in the gaming industry.

Apart from Disney, Epic Games has attracted investments from notable entities, including Tencent, the Chinese gaming giant, and Sony PlayStation. The company operates a market for 3D digital assets and runs the Steam Store, further solidifying its position in the gaming industry.

Epic Games and Disney's prior collaborations

Disney's strategic licensing and collaboration with Epic Games have proven fruitful in bringing beloved characters to a new interactive platform, where characters from Marvel, Star Wars, The Nightmare Before Christmas, Tron, and more found their way into Fortnite.

While Disney has historically been more of a licensor than a direct creator of games, this strategic investment signifies a shift in its gaming strategy. Previously, Disney licensed figures like Spider-Man for successful video games, but this collaboration with Epic Games takes the company into a more active role in game development.

Beyond the realm of traditional gaming, Fortnite has grown into a powerful social platform, hosting live concerts and collaborations with diverse brands. Epic Games' Unreal Engine has played a crucial role in the visual-effects domain, contributing to the production of notable projects such as the live-action The Lion King, The Mandalorian, and the Kingdom Hearts 3 video game.