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Is Disney back in the metaverse?

12 March 2024

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Disney and Epic Games will collaborate to create an open and persistent game universe, bringing together characters from Star Wars, Marvel, Avatar and Pixar. The Walt Disney Company is taking a $1.5 billion equity stake in Epic Games to build what it calls a "persistent universe," less than a year after shuttering its Metaverse division. Founded in 1991, Epic Games is an American company founded by CEO Tim Sweeney. The company is headquartered in Cary, North Carolina and has more than 40 offices worldwide. Today Epic is a leading interactive entertainment company and provider of 3D engine technology.

In a official statement, Disney said the multi-year project — subject to regulatory approval — will be a gaming experience that interacts with Fortnite, Epic's flagship game. The project will be a “universe of games and entertainment,” allowing users to “play, watch, shop and interact with content, characters and stories” from Disney assets. Tim Sweeney, founder and CEO of Epic Games, stated that the two companies will "build a persistent, open and interoperable ecosystem", while Bob Iger, CEO of Disney, stated that "this marks Disney's largest entry into the world of games". Disney added that "players, gamers and fans will be able to create their own stories and experiences." Epic's game engine, Unreal Engine, will power the so-called universe, but no details on the project's launch date have been shared.

Disney's afterthought about metaverse

Disney's move comes less than a year after it dismantled its Metaverse division in March 2023, cutting about 50 workers in an effort to reduce operating expenses. This choice is going to the direction, for Disney, to become part of one of the huge metaverse, without having the possibilities to own its space in the metaverse without using Fortnite. That's the turning point here. Is this the destiny of metaverse? Or maybe there's an alternative. Better said, we need the bravery to create independent metaverses, where data and users can run with precise rules and privacy.

The partnership announcement comes on the same day as Disney's Q1 2024 results, following a string of major box office and streaming flops in 2023. For the quarter ended December 30, 2023, Disney posted revenue of $23.6 billion, narrowly beating the estimates of Zacks Wall Street analysts. However, revenue growth remained flat compared to the $23.5 billion reported in the same quarter a year earlier. Disney said it will pay a dividend of 45 cents per share, a 50% increase from the last paid in January. Its stock price closed the day at around $99, according to Google Finance, but jumped nearly 7% to over $105 in after-hours trading. Epic's Sweeney has been focusing on the metaverse for some time and in May 2023 he joked about the idea that the latter was "dead", citing the 600 million monthly active users across multiple metaverses. However, four months later, in September, Epic cut its headcount by 16% — about 830 people — saying that unrealistic revenue expectations from the metaverse caused it to spend "way more" than it could afford. Epic has already collaborated on similar projects in the past.

SOURCE: Cointelegraph

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