It’s no secret that Disney’s keen on entering new forms of entertainment. Its plan to allow user-prompted AI-generated video on Disney+ has been set back by OpenAI abruptly pulling the plug on Sora. In the meantime, the other area it’s been eyeing is gaming.
Back in 2024, Disney made a $1.5 billion investment in Epic Games, developer of the third-person shooter Fortnite and the hugely popular game development software Unreal Engine. There’s increasing speculation that Disney might buy Epic Games, and some developers are getting worried. What would a Disney-owned Unreal Engine 5 look like?
(Image credit: Disney / Epic Games)
Disney’s investment in Epic was intended to build gaming-like content for Disney+ and create what was described at the time as a “persistent, open and interoperable ecosystem” that would merge Disney and Fortnite. So far, there’s been the Disneyland Game Rush in Fortnite itself, and more recently the launch of Star Wars Fortnite islands.
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When Disney made its investment, Epic Games is reportedly valued at around $22.5 billion. That price tag might make a buyout seem unlikely, but the developer’s facing challenges. Fortnite became a gold mine in the years after its launch in 2017, but the pay off from Epic’s all-in bet on one free-to-play live-service game is starting to dwindle.
Epic’s been ploughing through collabs to try to maintain interest in Fortnite and expanding the game into a broader entertainment platform with its music festivals and movie premieres like Tarantino’s Kill Bill lost chapter. But it’s getting harder to keep it fresh, and there are signs Fortnite’s time may have passed.
Star Wars assets available in Unreal Editor for Fortnite (Image credit: Epic Games)
Epic announced more than 1,000 layoffs last month. CEO Tim Sweeney blamed “industry-wide challenges” but recognised that there were also issues unique to its game including a downturn in engagement that started last year.
“Despite Fortnite remaining one of the most successful games in the world, we’ve had challenges delivering consistent Fortnite magic with every season; we’re only in the early stages of returning to mobile and optimizing Fortnite for the world’s billions of smartphones; and in being the industry’s vanguard we have taken a lot of bullets in a battle which is only in the early days of paying off for ourselves and all developers,” he said.
It’s been pointed out that such drastic cuts are sometimes made to make a company look more attractive to a potential buyer.
On The Town podcast recently, the tech journalist Alex Heath said: “I know for a fact there are senior executives in Disney who want them to buy Epic and are just waiting for that moment, and then there are others who think it’s a bad idea. If Epic ever sold, if it ever decided to call it quits on being an independent company, Disney would be the most natural home for it for a lot of reasons.”
The concern for game developers is that Epic Games is much more than Fortnite. Unreal Engine have overtaken Unity to claim the biggest figure in terms of game sales for a single platform on Steam. Disney uses Unreal Engine 5 for Disney Park attractions as well as its film and TV series, but Unreal has also been used for everything from games like Clair Obscur: Expedition 33 to animation like KPop Demon Hunters.
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Epic has maintained its free-to-use model for Unreal Engine 5, under which game developers only pay a share of profits if their game makes over $1 million. That’s made the software popular with indie developers, including those aiming for AAA-level graphics on relatively smaller budgets.
Would Disney keep that pricing model? Some are worried about whether it would keep Unreal going at all.
“If Disney buys Epic then I guess I’m learning either C# or GDscript, because no, I am not going to continue using an engine from a company that might get shut down,” one dev wrote on Reddit recently.
“As someone who left Unity in favor of Unreal, if Disney acquires Epic I am just gonna make my own language and engine,” someone else wrote.
While some think a Disney acquisition would be horrific for developers, others see positives. Some point to Disney’s work with Alias (later bought by Autodesk) in the ’90s and Pixar’s continued publication of white papers. Some suggest Disney and Pixar’s movie tech could get added to Unreal Engine.
“Walt Disney Imagineering has brought so many useful things to making movies, shows, games that it wouldn’t be a bad idea,” one person thinks. “If they put this in the Imagineering style setup it could be something that gets investment and heavy focus. Disney is one of the few places that values R&D.”
“Disney oddly enough does seem to open up a lot: tons of really cool white papers get published and people make use of billion dollar research that gets integrated into open source often,” another person adds. “They do hire a lot of talented people at an engineering level, but they give back. Sure they keep some things proprietary, like Marionette/Presto, but OpenUSD is amazing.
Epic is a founder-controlled company, so it will be for Tim Sweeney to decide if he ever wants to sell, and he’s shown no inclination to date. There have been rumours about Disney buying game companies in the past, including EA, and they didn’t come to fruition. In Epic, Disney would also have to contend with China-based Tencent, which currently has a larger stake at 28%
What do you think? Would a Disney acquisition be good for Unreal Engine, or is it time to start learning Godot?