This Sucks: Why We Think Disney Will Buy Epic Games | Extra Credits Gaming

A few years ago, millions of people logged into Fortnite and went to a concert. And not in the like watch a live stream on an in-game monitor sense. They went to the concert. Their avatars stood together in a giant surreal dreamscape while Ariana Grande performed overhead like some kind of impossible theme park attraction. Heck, I was one of those avatars and the experience was so surprising to me, I ended up writing a whole episode about it. You can check that out here. Now, I imagine for younger players, none of this felt strange. Of course Fortnite hosts concerts. Where you been, Unc? But for a lot of other people, especially non-gamers, moments like these were when Fortnite stopped looking like a video game and started looking like a place. And that's why our studio director Jeff wasn't especially surprised when he heard a juicy rumor that to me at first sounded a little bit wild. Disney might buy Epic Games. But that's crazy, right? I mean, what would the house of the mouse even do with Fortnite that they haven't already done? Give Spider-Man two machine guns? But then we dug in a

bit and oh boy, turns out it's not just about Disney or Epic, but rather a different company they're actually competing with who is an existential threat to Disney's core audience. Yeah, turns out this tale is full of fascinating facets, big and small, that all led us to one inevitable conclusion. I don't like it, but I'm calling it now. Disney will in fact try to buy Epic. Don't believe me? That's okay. Would you mind checking back in about 13 minutes? Before we continue today's episode, Extra Credits is only made possible due to the support of our YouTube members and patrons over on Patreon. If you'd like to become a member of our EC community, click join below or the link in the description. So, this exploration into predictive mergers actually started as a design club episode where Will and Jeff deep dove into this for an hour and a half. And I would urge you to check that out after this episode for additional info, nuance, and Will's patented anti-corpo fire. Yeah, And on that note, let's have

a moment of clarity right up top. Just because we think this is going to happen does not mean we think it should happen. I personally believe the level of consolidation we are seeing today in media is one of the most poisonous things to video games as a whole. Oh, and if I had my druthers, I would go full necromancer, dig up Roosevelt, and let zombie Teddy trust bust the heck out of this monopolistic hellscape. But, sadly, that isn't the world in, and my wand is in the shop. So, since my fanfic of vengeance will not come to fruition, let me set the real world stage instead. When most people think about Disney competitors, they think about companies that also make movies and television. Your Netflixes, Warner Brothers, Amazon, maybe Apples. But, that framing does miss what Disney actually does. Disney's not fundamentally in the business of films and TV, it's in the business of building places people emotionally move into. Sometimes those places are physical, like Disneyland, Disney World, and Disney Cruises. And sometimes these places are

fictional, like Marvel, Star Wars, and Pixar movies. The important thing to them isn't really the medium, it's the carefully designed environments built around emotional immersion. It's the feeling that they're after. Disney's goal is to create worlds people want to be a part of, and of course pay for the privilege. And once you start looking at Disney that way, a very different competitor suddenly comes into focus. Nintendo. Because Nintendo has spent the last 40 years doing almost the exact same thing, just digitally. Nintendo's real genius was obviously not raw technology. They rarely win hardware or graphics races, after all. No, what Nintendo wins at is emotional attachment. Think of Mario, Pokémon, Zelda, or Animal Crossing. These aren't just games people enjoy. They are worlds people grow up inside. That's why Nintendo audiences tend to behave a little differently from almost any other gaming fans. People don't simply consume Nintendo worlds. They build memories there. People remember

trading Pokémon cards at recess or arguing about who got to be Mario on the couch when they were little or even introducing those same characters to their own kids years later. AKA, Nintendo specializes in emotional geography. And critically, as any parent can attest to, the Venn diagram of Disney and Nintendo audiences of kids, teens, and families is basically almost just like one circle. People looking for entertainment that feels welcoming, colorful, adventurous, and emotionally sincere. And that overlap matters because competition in entertainment is no longer just about who has the best movie or the best console. It's about who creates the places audiences emotionally want to live and spend money to return to. Plus, those places over the last decade have increasingly become digital IP IRL third spaces. And those digital places are where Disney hasn't historically done that well. Of course, by digital places, I don't just mean in games. This also includes persistent

online shared social places, which is where Epic suddenly becomes way more interesting because they potentially can give Disney three things that they do not fully control at this moment. One, a direct relationship with video game players. Two, the infrastructure powering modern digital worlds. And three, a massive persistent social space where younger audiences are already spending time. More specifically, the Epic Games Store, Unreal Engine, and Fortnite. And these three pieces don't function separately. They all build towards each other. The store is the gateway to the relationship, the engine powers the worlds, and Fortnite becomes one of those places those worlds actually live. Now, of these three pieces, the Epic Games Store might seem like the least exciting to talk about, but strategically, it is pretty dang important because we all know that storefronts in gaming are not just stores, they're gateways. And whoever owns the gateway owns access to the audience. Heck, Nintendo understands this deeply. When someone buys a

Nintendo game, Nintendo controls almost every layer of that interaction. The hardware, the storefront, the account system, the recommendations, the whole Koopa Lovin' ecosystem. And because they control all of that, Nintendo maintains a remarkably direct relationship with its audience. I mean, their showcases are literally called Nintendo Direct. Disney, however, they don't have that in gaming. If they want to release a game, it currently has to go through someone else's platform, like Sony, Valve, Microsoft, Apple, or Google, which means Disney is always operating inside someone else's ecosystem. And companies at the gargantuan scale like Disney is at, to say they dislike dependency would be an understatement, especially in spaces they believe matter to the future of entertainment. Now, to be clear, Disney isn't going to buy the Epic Store because the Epic Store is currently dominating the PC gaming market. I think we all know it's not, but even if it was, that wouldn't be the point. Disney wouldn't be buying the store for what it is today, it would be buying it for what

it enables tomorrow. Imagine this dark future because I guarantee you Disney sure has. You are 12 years old and open the Epic Disney Store the same weekend a new Marvel movie gets released. You actually just got home from seeing it and there's an ad for it right there that's clickable and sends you into a living Fortnite Avengers space tied directly into the film where you can play missions with friends and of course purchase cosmetics connected to scenes you just saw in the theater. Then it would gently guide you into another experience on the Disney world without ever leaving the Disney Store ecosystem. Rinse, repeat, cry into a pillow. Now imagine you were the company controlling that entire interaction. That is the kind of relationship platform companies dream about. Not just isolated purchases, persistent engagement which locks you into an ecosystem and trains you early to stay there your whole life. This is where the Nintendo comparison starts becoming even clearer. Nintendo's strength is never any single product, it's the cohesion of it all. Everything

reinforces everything else. Disney already has IP people love, so the store is simply the first step needed to turn that IP into a persistent digital ecosystem. Of course, storefronts alone don't build digital worlds, and for that Disney would need something even more important, the technology that powers them. And this is where the conversation stops being Disney buys a game company and starts becoming much larger. Enter Epic's Unreal Engine. In 2026, Unreal is no longer just for making video games. It's now more akin to a building block of modern entertainment. One useful way to think about it is this, owning Unreal is a little bit like owning all the materials that roads are built out of. And roads shape how everything moves, so if you own the means of production, you kind of get to decide how and where people can go. And entire creative industries increasingly move through Unreal's infrastructure, whether we the audience realizes it or not. Games run on it, animation pipelines run on it,

virtual sets for films run on it, the effects houses run on it. Now, Disney is already deeply invested in that ecosystem. If you've seen the behind the scenes footage from productions like The Mandalorian, for example, you've seen giant LED environments rendering digital worlds around actors in real time. That technology, colloquially known as a volume stage, is powered by the Unreal Engine, and it's changed how movies and television get made. It can help directors and actors see CGI environments during live filming, elements can be changed in real time, allowing production to become more flexible, and entire pipelines are becoming faster and cheaper. This isn't experimental technology anymore. It's become standard. And this changes the acquisition conversation dramatically. Because once Disney depends on Unreal at that scale, a different question starts emerging in Mickey's mind. What would happen if someone else buys Epic first? Now this acquisition is about protecting critical infrastructure. Because imagine a world where like Apple or Amazon buys

Epic, or Tencent buys a whole bunch more of it, then Disney would have to depend on production technology controlled by another giant corporation who might have entirely different or conflicting priorities. That's the kind of strategic vulnerability that companies this large spend billions of dollars trying to avoid. Because ownership of materials for infrastructure matters, like a lot. Right now, Unreal is broadly accessible. Massive publishers use it, but so do small teams, indie devs, and students. Heck, that openness is part of why Unreal became so ubiquitous in the first place. If a future owner started restricting access, prioritizing only certain platforms, or slowly turning Unreal into a more closed ecosystem, the consequences for anyone in the industry that doesn't own it could be enormous. And due to Disney's track record, plenty of people in gaming hear something like Disney owning Unreal Engine and immediately think that sounds like an unmitigated disaster. Hi, hello, I am one of those people. Jeff, he's not so

sure yet. But one thing that we both do agree on is that we are right to worry about this. The games industry is already neck deep in consolidation. Players are tired of ecosystems getting locked down. Developers are tired of dependence on giant corporations controlling more and more infrastructure. And everyone with a soul is tired of the tens of thousands of layoffs in the gaming space over the last few years because one company decided to buy another. Those concerns are very real and they affect very real people. But as I'm told to constantly remember, we are not talking about if this would be good for the entertainment industry. We are talking about why we think Disney is going to pay a Scrooge McDuck's worth vault of cash to acquire Epic. Of course, all of that doesn't matter if the infrastructure they're building doesn't take you any place you'd want to invest a lot of time in. And this is where the entire dark argument clicks into place. Because Fortnite may be one of the clearest examples we've ever seen of entertainment evolving from media into

environment. Not a game they play, a place they go. And for younger audiences especially, who are kind of starved these days for IRL third spaces, that distinction is incredibly important. For many kids, Fortnite functions less like Halo or Call of Duty and more like a digital mall, skate park, arcade, convention center, and social network all fused into one. People log in just to exist there, to hang out, to talk, and experience events together. And like say a good session of D&D, sometimes the game itself that you're all there for is almost kind of secondary to the human interaction you get to have while doing it. And from Disney's perspective, that's enticing. Because Disney's greatest strength has never simply been in storytelling. It's been in environmental storytelling. Creating spaces that make people feel emotionally transported has really been their bread and butter for years. That's what Disneyland does. You walk through Pirates of the Caribbean and momentarily you feel like you've entered another world. Those doors open on Rise of the

Resistance at Galaxy's Edge and suddenly Star Wars feels physically real. I've been there and if you have, you know what I'm talking about. Disney builds emotional immersion better than almost anyone else in the business. So, now imagine applying that design philosophy to a persistent online world with hundreds of millions of existing and paying users already emotionally invested in the space itself. So, when people say something like, "Why would Disney want to buy a shooter video game? My answer is, "Nah, man. Fortnite's not that anymore. It's a digital theme park. One where concerts happen, movies premiere, brands sell their wares, creators make environments, and friends gather socially. All existing in a big old evolving online world." Right now, Disney participates in Fortnite transactionally. They have Marvel skins, Star Wars events I will never forgive them for, and temporary collaborations. But, ownership would change that completely because then Disney wouldn't be licensing into a space, but rather helping to shape the space itself to whatever it wanted. And unlike physical

theme parks, these experiences would scale to infinity and beyond. No travel to arrange, no hotels to manage, no super spreaded cruises to contain, just persistent access to an online shared world, perhaps maybe for a nominal fee that I'm sure would never increase exponentially year over year over year after you've been lured into thinking it's affordable then all of a sudden you're paying 30 bucks a month. WHERE WAS I? AH, YES. This is why the rumor matters much more than Disney buys Fortnite. Because if this comes to fruition, what Disney may actually be buying is the ability to compete for the next generation's emotional home turf. Nintendo understood it years ago. Fortnite's proving it now at a global scale, and we think Disney realizes that the next Disneyland, it's not going to be built in Anaheim. It's going to be built everywhere. Well, it's been about 13 minutes. Two questions for you. One, are you convinced yet? And two, are you as depressed as I am?

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