The Walt Disney Company has invested $1.5 billion to acquire an equity stake in Epic Games as the two firms plot a major multi-year project.

Disney plans to build a new “games and entertainment universe” that aims to enable consumers to “play, watch, shop and engage with content, characters and stories from Disney, Pixar, Marvel, Star Wars, Avatar and more”.

The new content will be developed with Unreal Engine and will “interoperate” with Epic’s hit battle royale title Fortnite.

The Walt Disney Company CEO Robert Iger called the deal the company’s “biggest entry ever into the world of games”.

Epic partnership

"Our exciting new relationship with Epic Games will bring together Disney’s beloved brands and franchises with the hugely popular Fortnite in a transformational new games and entertainment universe," said The Walt Disney company CEO Robert Iger.

"This marks Disney’s biggest entry ever into the world of games and offers significant opportunities for growth and expansion. We can’t wait for fans to experience the Disney stories and worlds they love in groundbreaking new ways."

Epic Games CEO Tim Sweeney added: "Disney was one of the first companies to believe in the potential of bringing their worlds together with ours in Fortnite, and they use Unreal Engine across their portfolio.

"Now we’re collaborating on something entirely new to build a persistent, open and interoperable ecosystem that will bring together the Disney and Fortnite communities."

Historic collaboration

Disney and Epic have already collaborated in the past in Fortnite with various licensing partnerships to bring Marvel and Star Wars characters and stories to the title. Epic also previously participated in the Disney Accelerator program in 2017.

In April 2022, Sony and LEGO each invested $1 billion into Epic Games, valuing the company at $31.5 billion at the time.

In December, LEGO launched a new game mode within Fortnite, attracting a high of 2.4 million players at its peak, according to Fortnite.gg.