Disney is in talks to acquire Epic Games, former executives: Games are the real driver of stock price growth, Unreal Engine dominates creators

Former Disney executive Kevin Mayer publicly said that if the current CEO, Josh D’Amaro, wants to drive Disney’s growth, acquiring game assets like Epic Games is a key step. However, since Epic’s founder Tim Sweeney holds full voting control, whether a merger and acquisition can actually happen depends entirely on his attitude.
（Background: Web3 gaming is finally seeing large-scale adoption! Epic Games: Unreal Engine 6 is in development, built specifically for the metaverse）
（Background addition: Epic Games has cut 830 employees! The CEO admits: the metaverse isn’t that profitable…）

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• Internal disagreement: some want to buy, others think the risk is too high
• $1.5 billion as a baseline investment; both sides join forces to build a virtual world
• Pressure from Epic’s layoffs; the market sees it as a merger-and-acquisition opportunity

Kevin Mayer, who previously served as a Disney and TikTok executive and is now the CEO of Candle Media, said in an interview with CNBC on March 18 that if current Disney CEO Josh D’Amaro wants to drive the company’s revenue and stock price growth, he would need to take “bolder action,” including acquiring game companies like Epic Games.

He emphasized that the gaming industry is one of the key areas Disney can focus on in the future, and he specifically pointed to Disney’s $1.5 billion investment in Epic, the developer of “Fortnite,” calling it a “very correct decision.” However, Disney still needs to think further about how to transform its gaming business into a true growth engine.

“He (D’Amaro) poured a quite substantial amount of capital into Epic Games, and I think that’s a very right decision. He has already handed this business over to Dana, and that in itself is a very clear signal. Next, what needs to be considered is how to further leverage this groundwork. I believe that whether it’s Epic or other gaming-related assets, in terms of Disney’s overall asset map, it will be an extremely valuable enhancement.”

Internal disagreement: some want to buy, others think the risk is too high

Tech reporter Alex Heath, meanwhile, said on the Podcast program “The Town” that it’s “certain” that there are indeed executives inside Disney who want to acquire Epic Games and are waiting for the right time to make a move. However, he also added that there is no consensus within the company on this matter, and some decision-makers believe such an acquisition carries too much risk.

Heath pointed out that if Epic were to actually head toward selling in the future, “Disney would be one of the most natural destinations,” because the two sides are highly aligned in IP, content, and the development of virtual worlds. The biggest uncertainty factor in this deal, however, always comes down to Epic founder and CEO Tim Sweeney alone.

Because Sweeney holds all of Epic’s voting control, he can unilaterally decide whether the company should be sold. Even if Disney is interested, it would be difficult to steer the process. Unless Sweeney chooses to leave in the future or adjusts his approach to operations, the odds of a merger and acquisition will remain relatively low.

$1.5 billion investment as a baseline; both sides join forces to build a virtual world

At present, the relationship between Disney and Epic is mainly based on the $1.5 billion investment case in 2024. The two sides are working together to build a large interactive world centered on “Fortnite,” while integrating Disney’s IP. The goal is similar to Roblox—offering players a variety of experiences such as social interaction, entertainment, and virtual consumption.

Before this, Disney largely operated its gaming business through licensing. Titles developed by external studios, such as “Star Wars Jedi: Survivor” made by Respawn, are examples. Disney’s IPs like Marvel are also widely licensed to different developers. In the past, Disney tried to build its own “Disney Interactive Studios,” but it ultimately shut down and was dissolved in 2016 with the end of “Disney Infinity.” In addition, rumors about Disney acquiring Electronic Arts (EA) have never materialized, indicating that the company has taken a relatively cautious stance toward major M&A deals.

Pressure from Epic’s layoffs; the market sees it as an M&A opportunity

On the other hand, Epic Games has recently carried out large-scale layoffs, affecting more than 1,000 employees, putting cost pressure on its operations. Combined with “Fortnite” revenue weakening and reports that some modes are being shut down, outsiders have started to examine the stability of its long-term development. The market also believes Disney may view this as an opportunity to broaden investments, or even to initiate an acquisition.