The Walt Disney Company (DIS +1.39%) is once again aiming to make video games a much bigger part of its overall business. Disney has made multiple earlier pushes in the video game industry and seen some significant successes, but setbacks in the space have previously caused the company to cut back on its interactive-entertainment ambitions.
Now, the House of Mouse appears to be ready for another big push in the gaming space. The company announced last month that it was integrating its gaming branch into its core entertainment division.
Disney is also moving full speed ahead on its partnership with Epic Games. Here’s what investors need to know.
Image source: Walt Disney.
Disney is hoping video games can energize its growth
After deciding that it didn’t want to primarily lean on its own internal game-development capabilities, Disney announced in 2024 that it was investing $1.5 billion in Epic Games as a component in a partnership to bolster its standing in gaming. Epic Games is the company behind Fortnite — one of the last decade’s most popular online multiplayer games.
Disney is looking for ways to continue evolving along with the shifting entertainment landscape and find new avenues to drive growth. While 2026 is shaping up to be a strong year for the company’s theatrical business, performance has been under pressure since the coronavirus pandemic. Recent performance for key titles in its Star Wars and Marvel Cinematic Universe franchises has also raised concerns that some of the company’s biggest properties could be losing steam.
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Adding to these pressures, the company’s media networks segment continues to face pressures connected to the rise of streaming. Disney’s ESPN still depends on carrier subscription fees that are the envy of the broader cable and satellite television industries, but declines in linear and satellite subscription customer bases mean that the House of Mouse is up against some powerful headwinds.
Can Disney be a gaming winner?
Disney is betting that integrating Star Wars and characters from the MCU into Fortnite can help reenergize these hugely valuable properties. The move is also part of a broader “persistent universe” strategy. With video games introducing another dimension of media content to engage with, fans of the company’s movie and television series can turn to interactive worlds for new ways to engage with their favorite characters and settings.
Disney is hoping that it can use Fortnite and other gaming services to build social platforms that support its characters and franchises. The company isn’t taking an exclusive approach to its partnership with Epic, and it will continue to license properties to other third-party developers.
The diversification push could wind up being a smart one. Epic recently announced that it would be laying off roughly 1,000 employees in response to engagement declines for Fortnite. The game remains enormously popular, but it’s an aging title that is seeing declines in user activity.
While Disney has the potential to score substantial wins in the gaming space, it’s also pursuing a relatively low-risk strategy. Partnerships should continue to give the company the chance to reach wide audiences, but the strategy also means that other creators are being tasked with a lot of the responsibility when it comes to delivering wins.
‘ The preceding article may include information circulated by third parties ’
‘ Some details of this article were extracted from the following source www.fool.com ’
