The Disney-Epic team-up is the first metaverse deal that really matters

“Play, watch, shop and participate.”

If you were under the illusion that Disney’s new partnership with Epic Games was on a… Fortnite-connected ‘games and entertainment universe’ was a traditional video game, which is where this line came from Disney announcement should expose you.

Disney and Epic are pretty clear that what they’re building is more than “a world-class gaming experience.” The promotional artwork released alongside the announcement shows what looks like a digital version of one of Disney’s own theme parks. A ‘World of Disney’ plaza is surrounded by themed buildings The nightmare Before Christmas, CarsAnd The Avengers. Corporate logos for Disney Plus and 20th Century Studios float near an ESPN stadium and a giant statue of… is that Groot? The battle for the planet Hoth rages forever in a distant Star Wars zone. There are even virtual Disney cruise ships.

Like Fortnite So this in itself will be a space where you can do more than just jump in X-wings and fly around and blow things up. It looks like a place where you can hang out with your friends and stare at cool, recognizable things; a level of social, virtual tourism is implied. But the interesting verbs in that sentence – the ones that suggest an extension of what Fortnite already does that – his ‘watching’ and ‘shopping’.

These verbs are the core of The Walt Disney Company’s identity: a company that has spent 100 years making things for people to look at, and selling merchandise for most of those 100 years. Nasty Fortnite, viewing and shopping are important, but less central. Epic makes its billions Fortnite‘s item store, but it has yet to successfully and consistently sell real goods from within the game. It’s not entirely clear whether Disney means players will purchase in-game items or physical merchandise, but it’s a safe bet it means both.

Disney and Epic’s vision of what their “persistent universe” will look like.
Image: Disney/Epic Games

‘Watching’ is even more interesting. Fortnite occasionally transforms into a space for more passive entertainment experiences: the season-ending event spectacles and the massive virtual concerts are the best-known examples, but it has hosted trailers and films before, including the debut of the trailer for Basic principle and conducting virtual screenings of three previous Christopher Nolan films in 2020.

Disney and Epic could do everything from promotional activations like this to actually granting customers access to the entire Disney Plus streaming catalog in-game. Eventized, communal viewing experiences – essentially viewing parties for millions of people – could be organized for major trailer drops, episode premieres, sporting events or fan conventions; no other medium can provide this kind of experience. And it doesn’t have to be limited to animation, Star Wars and Marvel either. Disney’s portfolio includes everything from ESPN to The Simpsonscontributes to National Geographic The bear on Hulu.

Speculation aside, the idea is that Disney is trying to offer its content for viewing within an entirely new medium – essentially Disney Plus to where Fortnite players are – is telling. (“We compete with (and lose to) Fortnite more than HBO,” Netflix told investors in 2019. If you can’t beat them, join them.) The concept for the Disney-Epic project appears to be a hybrid that combines Disney parks, licensed video games, streaming services and retail stores into a single virtual space.

Let’s cut to the chase and use the word we’ve been avoiding so far. What Disney and Epic are building is a metaverse. A corporate, branded metaverse. Or perhaps a branded fiefdom within the broader metaverse Fortnite.

(What exactly is a metaverse? Well, it’s complicated and it depends on who you ask, but I’ve done my best to answer that question here. Basically, it’s a virtual social space in which you can do a variety of activities can do, where users are usually embodied in avatars.)

Metaverse chatter has declined since Mark Zuckerberg renamed his company from Facebook to Meta in 2021, and since it was the buzzword of the year in 2022. Tech trend chasers have largely turned to AI. In fact, Disney has reportedly shut down its own Metaverse project last year (presumably because it saw more potential in its partnership with Epic). Meta and others in the tech industry had latched onto the idea of ​​a virtual reality Internet that would replace smartphones. It remains to be proven that large numbers of people want that, but millions of people certainly want to spend time in it Fortnite.

Disney’s decision to collaborate with Epic on a metaverse experience based on Fortnite is hugely important – and, dare I say, quite clever. It recognizes two factors that most other metaverse proponents, including Zuckerberg, seem resistant to. The first is that while gaming may not be the only activity in the metaverse, it is an essential portal to it. Gaming has established the visual and control languages ​​and the technologies upon which the metaverse is based; it’s part of the concept, because the metaverse was created in the image of gaming. For those reasons, gamers – especially the generation of gamers they grew up with Minecraft, Fortnite, and Roblox – will be the early adopters of the metaverse. In a sense, they already are.

Epic's ability to host hugely popular virtual events – like this one with Ariana Grande – has established Fortnite's metaverse credentials.

Image: Epic Games

The second factor is simple and related. Disney has foreseen that building and trying to attract people to its own walled metaverse garden would be a foolish endeavor. The key wording from the press release here is that Disney’s persistent universe will “interoperate” with it. Fortnitewhich strongly suggests that it will not only use the game’s technology, but also share its account system and (if Disney has any idea) player avatars. Fortnite has hundreds of millions of registered users, and the largest live events attract tens of millions of concurrent players. It’s a huge social platform for Disney to build into – something not available anywhere other than Roblox, which is probably too unruly and Wild West for Disney’s tastes.

It will only add to Disney’s comfort that it has already worked extensively with Epic to promote its franchises within Fortnite, and used its Unreal technology in parks and film production. The only thing that’s likely to make Disney a little nervous is Epic’s recent focus on user-generated content within Fortnite. The company is known for its protective and controlling nature.

To give Disney credit, it seems to have realized how crucial customization, creativity and a sense of ownership are to a successful virtual world. “Players, gamers and fans will be able to create their own stories and experiences, express their fandom in a distinctly Disney way, and share content with each other in ways they enjoy,” Disney said in the announcement. (“In a decidedly Disney way” does quite a bit of work in this sentence, mind you.)

The $1.5 billion Disney invested in Epic as part of the deal is making headlines, but the significance of this project goes far beyond that. It’s a huge vote of confidence (from a company obsessed with brand safety) that makes Epic the de facto leader in the metaverse market, and Fortnite as the main platform for virtual customer worlds. Disney has determined that truly valuable virtual real estate is not to be found in some unregulated crypto haven, but in the hands of a careful curator with a built-in audience. In one fell swoop, the deal redefines the metaverse of the tech industry’s vision of Zoom-in-a-headset into something far more immediately understandable and engaging: an all-encompassing theme park-style entertainment experience, available on any screen that allows you to use a controller can synchronize.