Why Disney Wants To Buy Epic | Design Club

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Good time zone internet. Hello and welcome to Design Club, the only design show on the internet that has one host who is very EP today. I am that EP humble host will joined as always by my pal Jeff. Say hi to the people, Jeff. Hi to the people, Jeff. Hey everybody, I am Jeffrey Zeldman, the studio director of Extra Credits and more importantly for Design Club, a long-time video game designer. Long-time, long-time, like 20 plus years here with my good buddy Will, voice of the people over on Twitch and our Twitch overlord. The people
Who is EP today? Yeah, the the the people have spoken. They are EP.
[snorts]
Um, but today's topic is uh is an interesting one and I want to kind of set up guardrails cuz I feel like this is a contentious topic, Brett. Because today we're going to talk about dis- the rumor and the idea of Disney acquiring Epic Games.

Bum bum bum.
Now, some people may think that this is us saying this is a good thing for the industry. Mhm. Yeah. I'm not saying that, certainly. What we're trying to do is look at why
No, cuz that could go a whole bunch of ways and what we will talk about that during the discussion.
Correct. What we want to do is we want to explore this idea and talk about it and so um if you know, you hate Disney and you love Epic and you think this would be the worst thing for Epic, totally fair.
Or vice versa. If you hate Epic and love Disney. Right. Whatever the case may be, we're trying to explore what this idea would look like because there are credible uh rumors floating around that it may be on the horizon and we think it is an interesting topic for sort of this thought experiment breakdown of what would the world look like and why might Disney do this, right? Cuz like it doesn't necessarily seem the most straightforward, right? Yeah. And

actually, the real reason we're doing this is Will told me the rumor. I sat for a second and said, "Oh, wait." And Will said, "I don't know if this could be an interesting topic." And we talked about it for 10 minutes and Will just started like salivating. He's like, "Oh." Yeah, there's there's
going to be a great topic.
There there's a ton of um there is a ton of stuff to talk about. And one of them is this, yeah. Isn't Disney borderline a monopoly? Kind of. Um we're going to talk a little bit about what Disney already owns as we get started. Um But first
what they don't. Yeah, what they
And what they don't is actually kind of the most interesting part of why this rumor is has legs. Like I can see a world where this happens and makes a whole bunch of sense from Disney and Epic's perspective. Yes.
And that's kind of what we're going to be exploring here as well as hey, how about everybody else's perspective?
Yeah.

Um Oh, and by the way, on YouTube, if you saw our earlier thumbnail,
Yeah. thank you. Yeah, good good call. Yeah, yeah, that was not our intention. It was Yeah. We were I think what we wrote um when we were talking about should Disney buy Epic, it was a tactical move looking at it from Disney's perspective, not a moral I you know, actually it was why Disney should buy Epic. Yeah. Because we just finished like a half hour discussion amongst ourselves of why it made sense for them to do that. Yeah. Or more sense to do it than not. And so we named the thumbnail that. And then I think a whole bunch of people were like, "Wait, no." Yeah, right. Yeah. So so so thank you for the feedback on that. Um you you always appreciate it.
Why Disney wants to buy Epic, which I think is truly a a better analogy.
say. Yeah. Yeah, so so so thank you for the feedback on that. Um you you always appreciate it. Yeah. Okay, so let's talk about where this is coming from. So IGN, Kotaku, PC Gamer, pretty much everyone is basing it on the same interview

um with veteran tech reporter Alex Heath who gave an interview on The Town podcast. Um and his claim is that senior executives at Disney are make are waiting for the right moment to make a bid on Epic specifically under the lens of Fortnite. Um and I think Fortnite is a big part of this.
interesting part of it, actually. But I think is least interesting part um in the wake of them uh offering or investing 1.5 billion dollars, uh which they did back in 2024 into Epic Games. Um So, there are people who are talking about this, there people talking about it uh through the idea of of of Fortnite and that Disney is definitely interested. The question is not so much do they want to, the question is at what price and when are sort of the

big questions um for for Disney cuz Disney already knows why they want to, but we're still trying to figure out why they might want to. Um Mhm. Oh, hold on. I'm going to do a test. Let's see. I want to see if I fixed my social stream so that anybody on Will, can you see that show up on your YouTube reader? Yeah. Okay, hey. I fixed it. Yay. I can now both chats again. Yeah. Um For those unfamiliar or or do you watch it for the first time, we have a very active chat and we love getting everybody's stuff up. Yep. Yep. Okay, let me pull up my copious thing of notes. Right. Okay, so so importantly, Disney has been much in the news and much in people's minds for becoming a conglomerate. Yes. Borderline or factual monopoly, we could dither forever about the actual terminology, but that's not really relevant to the conversation, I don't think. Um but they own a lot. There's there's an entire multi-page

Wikipedia article on the list of things that Disney owns. Um it's more
Actually, let's even get to that in a minute. Yeah.
Um so you're just talking about conglomerate. So, let's just be really honest about where we are on today's version of capitalism and everything else.
Yeah. Conglomerates currently are the way that people get leverage and do things. Yes. And there are very much cons and there are very much pros to the way that they do it. The biggest consumer pro has often been bundling in a way that we just didn't have 20 years ago. Sure. If you go buy a subscription to Disney Plus or to Netflix or to a whole bunch of other things or to you have an Amazon Prime account, your Amazon Prime account comes with a whole package of benefits the likes of which we didn't see 20, 30, 40 years ago. Right. And that's our pro side of kind of all, you know, putting

together a whole bunch of stuff. The con side is we're starting to get monopolistic and once you're kind of in and signed up, we've seen price ranges and we've also seen, and this is a technical term so I'm allowed to say it, enshittification.
Yes. Which basically is a service that gets good, everybody goes on and then slowly starts getting crappier as they keep adding extra bloat to it. We just And In In the gaming industry, we just saw a prime example of that with the degradation uh and the price hike for um Xbox Game Pass as an example, right? Xbox Game Pass started out with a very low price, got everyone on board and then was like, "Hey, that price is going up and you're getting less for it. Enjoy that." Yeah. And you're like, Oh, Google Search is honestly, since they've been selling more ads, it's not as good as it used to be. Yes. Amazon, which used to be a great subscription and I mean still is really cost-effective in a lot of ways, they keep raising it and throwing more stuff in or like they had the, you know, "Hey, you get the Amazon movies with it." Oh, no, wait, you don't

now there's ads on them and you have to pay more. Like Right. this is enshittification. Services that kind of try and lock you in. Yes. But we didn't have those. Like I'm pretty old. When I was growing up because we didn't have this kind of conglomerate that was that could put a a package together and say, "Here, for this price you get all of this." You may not use all of this, but they're able to put together offerings. And one of the things that the reason that companies do that is even if you don't use it, you you perceive that to be of value. Right? If you're like, "Wow, I wasn't you know, I was thinking about getting Amazon Prime and look at all these other benefits." Even if you never watch an Amazon Prime movie, never come over to Twitch and use your Amazon Prime subscription at twitch.television/extracredits, hint hint wink wink nudge nudge. Um never
Actually, I mean honestly, my Amazon subscription that also lets me subscribe, you know, gives me a free Twitch subscription, that's great. Right. And and but lots of people don't use it, but it is a thing that they get

to put on the big long list of here's the reason why you should spend money on our subscription and get locked into our ecosystem. Right? It's part
throw up. Yeah. I Yeah, from uh what Can I throw that back up? There we go. Cable company packages. Great point. This is they did have when I was a kid. Though not in the same way as now. I actually it's funny. I actually called five or six years ago to cancel my phone line to my cable company because I had through them cable, internet, phone, which is at this point a pretty standard package. Um actually, didn't used to be um like 20 years ago, but now or nowadays is. And they actually because they so didn't want me leaving the phone part because they thought that's like a step towards cord-cutting, which I have since done on other things, they were like, "What if you got all of that still, including the phone, but for the price of like one

thing instead of all three things? But you got to keep all three. And I was like, "Okay." And they're like, "Here you go." Because just like for them the added cost of me doing more than one was honestly trivial compared to me starting to peel off services and leave. Yes. And so, yeah. You're But you're right. Um cable cable bundled subscriptions are good probably the Yeah. first big thing I can think of from kind of that consolidation. I'm sure there's others we're missing. Yeah. But nowadays, you get the Amazons and you get the Netflix and you get all of these other things that offer you tons of services. Disney is one of those. Yes. Just straight up. And now we can get the I wanted to get that out of the way before we get to what Disney owns, kind of set the set the stage. Right.
Because when Will and I started looking, everybody knows Disney owns a lot. You'd be surprised how much they actually do.
Right. Disney owns a lot a lot. Okay, so let's let's tackle the the big the big

IP stuff first, right? Like the obvious stuff. Okay, so Disney owns We're going to do it really methodically and honestly. The original Disney IPs, right? The ones that are
Mickey, Donald, all all Yeah.
Yeah. Right.
Minnie. Yeah. The the the stuff that they actually came up with. Then they've got the what we're going to call like the Disney Princess IPs, the stuff that's like a real world fairy tale that they like sanded the serial numbers off and changed a couple of details so they could copyright it. So that's like Cinderella, Sleeping Beauty, Snow White, and more recently Moana. Moana. I mean, there is a actually theoretic Well, never mind. I won't get into theoretically cuz it's funny thing later, but Yeah. their princesses alone Yes. make them a freaking ton of money.
Yes. Both on movies and merchandise and everything else. Um Yeah, and uh Well, well, what we will get to this. Um I actually have an incredibly nerdy reason that this is not true. Uh it

involves the classification that Disney uses to decide who is and is not a Disney princess. We're not going to worry about that right now. Okay, so they own all of that. They also own all of Marvel, right? They own
Which was a good buy for them. Although a lot of people were like, "Eh." at the time. They've done okay with that one.
Powerful acquisition. So they own all of the Marvel movies, all the Marvel comics, all the Marvel um they get to do the licensing rights for Marvel games like Rivals.
Oh, wait. Video games, trading cards, lunchboxes, I mean, backpacks. Yeah. Right. Children's t-shirts. Halloween costumes. God, Disney probably makes so much money in Halloween costumes. That Anyway, that's a lot. Okay, they also own Star Wars. Yeah. And The whole thing. Right. So they own the Star Wars IP and um Which does make Princess Leia a Disney princess, which I was going to say earlier on the princess line.
Correct. She is, alien is not. There are reasons. Um the uh other important thing to note is

that when they did when they bought Star Wars, they didn't just buy Star Wars, they bought Lucasfilm and ILM. Yeah, Industrial Light & Magic, which is the special one of the big special effects houses of in Hollywood. Correct. So they own they own ILM, they own uh Lucasfilm, they own Lucas Arts, all of the Star Wars everything. It's not just the Star Wars IP, they own Star Wars. Um And they also own Pixar, which actually That one feels kind of weird. That one feels like that ship sailed so long ago that it
At the time it was big news. Like because Pixar was so successful without Disney. Yeah. That like it was one of the few kids alternative movies to Disney. Right.
And honestly, they kicked Disney's butt for a while. Oh, yeah.
Like when Pixar was releasing, Disney was kind of in a slump at that point. Yep. And there's a lot of great Pixar

IP. You know, everything from Cars to The Incredibles to Nemo. And they've just to Up. I mean, Pixar's had a series of hits that are mhm I now cast upon our audience the spell bones to dust. Nemo is 23 years old. Oh, and
Toy Story's older. Yeah, Toy Toy Story's older. Oh, you know what's funny? So I took my son, who's kindergartenish age, this last weekend to go see the Mario movie. Yeah. And he thought it was amazing. Mario Galaxy. Yeah. And so, he's now interested in other movies. Uh quick note for those of you who's never had young'uns that long or that age, their attention span is not the same as our attention span. And sometimes watching an entire movie is a big ask of a small person. Yes.
But he was enraptured with the movie, sat through it. I'm probably going to take him again this weekend Okay. to go see it. But I started looking up other

movies that he might be interested in now, and we He knows Toy Story 5 exists. And so I was like, "Well, there was a Toy Story, therefore 1 2 3 and 4." So I went to look up the trailer for Toy Story 1 to watch it. Realized how old it is and also looked at the CG, which I I'd remembered as being amazing. And it was for the time.
time it was. Yeah. But also, it it now does look 25 years old.
Yeah, that's correct. Right. So but that acquisition is old, right? Like it's been a while.
For most people, Pixar has been a part of Disney for a as long as they can No, not for most. For some people, Pixar has been part of Disney for as long as they existed. For a while, they were a scrappy upstart battling against Disney and trouncing them. Yep. Okay. So that's that's the big IPs. I don't think we're like super and and yes, there [clears throat] are some other associated families of IP. Some of those get complicated like X-Men. Um Yeah.

Yeah. Um Put on a skitter note that Yeah. Yeah, Disney's top 10 grossing films combined have already house made 13 billion dollars. Yes. And that's IP in one way. When we go list studios, studios also have associated IP. And these are more onesy-twosies like the Alien movies, like that that aren't that don't fit into like these other big generalized number. But quick rundown of some of the studios. Yeah. Uh ABC. They own all of ABC. They own uh what used to be 20th Century Fox and is now 20th Century Studios, but it's the same studio. Yeah. They own ESPN. Mhm. Searchlight.
Hold on for a second. ESPN Oh, and all of the numbers after that. ESPN 1 2 3 4.
own the the umbrella company ESPN. Basically, the biggest sports channel. Yes. Correct. Um they own Searchlight. Mhm. National Geographic. Mhm. Okay. Uh and National Geographic is a joint ownership

but Disney has a controlling share, so they own National Geographic. Not all of these are like strict ownership. These are like Disney controls or owns a majority stake, and other people might have part of it, but Disney's in control at the end of the day. Cool. Own enough to be able to do things with as they like. Yes. They also own History Channel and A&E. Mhm. Um But National Geographic, History Channel, A&E bucket. Yeah. ESPN bucket. 20th Century Fox and ABC bucket. I mean, just each of those buckets is um big. Right. So they have
why, for example, if you go buy a Disney Plus subscription, the sheer quantity of movies and TV shows you can see on it, because again, original Disney IP extended, Marvel, Star Wars, Pixar, ABC, Fox, ESPN, Searchlight, National Geographic, History Channel, A&E. I mean, that's a lot just right there. Yep. Mhm. Um and and that's and that's uh

screen entertainment, right? Yeah. So and they have a pretty controlling stake in the industry across the board, I would say. It's hard to It's hard to move throughout the the film industry because of their relationship with so many things like ILM and Fox or in 20th Century Fox and ABC to like not bump into Disney, right? Somewhere. Um they also own a truly astounding number of music labels. I will save you the time and say that it is a similar stake in the music industry as it is to the screen industry. They just have a gazillion film labels um that span across all different genres and styles and countries and languages and every Disney does music. Disney does a ton of music. Right? Um and then the last one, and this one's probably the one that's most relevant directly to our discussion.

To our upcoming discussion.
Right. is digital destinations. Mhm. Where do you go in your day-to-day life to interact with Disney property? Right. All of the things we just listed. Right. And there's like one and a half. Mhm. And that's the Disney Plus app. Yeah. Which is also and I saw people mention this, we're also going to bundle Hulu in cuz Disney Plus and Hulu have been best friends for years now, and they're sort of uh in meshed to an extent it is difficult to disentangle them because of that bundle, right? Disney Plus is bundled with a Hulu subscription, the ESPN subscription, the Nat Geo subscription, all of that. That's all Disney Plus. So that's the one and a half. Uh and they used to have Toontown Online, and they don't anymore. Toontown Online exists, but isn't
still exist? It's fan-run. It's not It's It is not It's It is It It does exist. I

actually know a streamer who plays Toontown Online as their primary thing, but it's not relevant in the global discussion, right? Definitely not in an era of Roblox and Fortnite, right? It's not like Roblox, Fortnite, Toontown. It's like Roblox, Fortnite Toontown. Like the gap is so huge. Um And actually, I'm seeing a lot of people in the comments that like, "Hey, Zibatsu, etc., you know, maybe break them up." Sure.
And just to mention, this is huge, but they're This is what you now need to compete against, say, Amazon, Right. which has pretty much all of the things we just mentioned. Warner Brothers, which has, you know, with HBO and DC Comics, uh pretty much all of the things we just mentioned. Netflix, which has a lot of the things we just mentioned. Sony, Paramount, I mean, that

you can start going on. There are easily 10 plus conglomerates like this Yeah.
that have huge groupings of things.
Right. And one of the weird ones that's actually becoming more and more relevant, we actually discussed briefly already, and that's Nintendo. Yep. Actually, I want to save Nintendo for a minute cuz I want to come back to Nintendo, if if you don't mind. Yeah, yeah, that's totally fine. So, there's a gap here. Mhm. Right? There There There's sort of a gap in their entertainment thing, right? So, they have small screen stuff. They have television channels, Disney Plus, other stuff, right? They have big screen stuff. Disney puts out a ton of movies, big blockbusters. There's Marvel movie like every as often as you can look at the movie theater. Um there are, you [snorts] know, children's movies and blockbusters and all of that. They're big into music. Mhm. Gaming.
They're missing a thing. They're missing

gaming, which is is a thing that is much on the rise, I would say. There have been individual games. Disney's Dreamlight Valley.
of their IP has been made into games, but Disney does not have a large amount of game development studios or publishers. Correct. They do have LucasArts, but LucasArts hasn't made a game that wasn't a direct reference to one of the OG LucasArts adventure games or a Star Wars game in long enough that that's not a thing they do anymore. W- D- After the acquisition, um Disney honestly gutted a lot like they tried some game dev stuff, realized it did They weren't as well suited up to deal with it and just kind of gutted and sold off Yeah. a lot of They were They were used to doing licensing deals with other groups Yeah. and decided that would be a more efficient use of their expertise than trying to run game studios.
did have Disney Interactive. Yeah, and Hearing firsthand, like, have you been there a little

while? I have friends that have worked for Disney properties. Yeah. Um Disney Interactive is a good point, not really a thing anymore, either. So, like, in the in the current um we we could we could do an entire hour on the history of Disney acquisitions and the things that they've gutted. Suffice it to say, they have in the past, but they don't right now. It's not a thing that they're having to
this is not unique to Disney. Many groups have bought other things and kept the pieces they wanted and Right. gutted the rest. And like, not saying it's good, just saying that this is Disney is not alone in how they operate.
This is one of the cons that a lot of people This is a fear that a lot of people have when um a group that makes media that they enjoy or love is acquired, right? That is a not uncommon thing, right? Even though it's in a similar way that Pixar has been owned by Disney like long enough that they're really the same company, right? I have such bad news. Wizards of the Coast has been owned by Hasbro long enough that the this is a Hasbro decision, not a WotC decision doesn't

really exist. While people still try and blame Hasbro for choices that WotC makes that they don't
entirely sure about it. We could talk about that on another podcast.
That one's a little more, but like the default knee-jerk reaction I hear is is to pass the buck from WotC to Hasbro immediately at the at the first reaction to anything that WotC does that people don't like. But like and honestly, these suck, but I prefer these acquisitions to say, random hedge fund decides they want to buy what is it, Activision? Yeah, or um the recent acquisition of EA that saddled EA with completely untenable debt and they're already going to start splitting EA apart.
Oh, so wait, it was EA? It was That was Kushner's one, right?
Yeah, yeah, the the the Saudi Arabian deal that acquired EA and is slowly beginning the process of stripping EA for parts. Yeah. Or Embracer's um decision to go buy everything including Asmodee, which owns all of the really cool board games because Asmodee bought them out and then realized they were

stunk and so did you They basically saddled all of their debt onto Asmodee and spun it. Yeah. Um So, now Asmodee will not be profitable for a very long time because they have to pay off all the Embracer debt, which is going to stifle some of the board like Embracer is the worst. Embracer is just Yeah, the Embracer of death. Correct. The worst, right? So, like
Not great. And that is a fear that a lot of people I mean, again, I'm just trying to say like I'm not saying this is good or bad. I'm just saying currently, this is the world we're living in that we're viewing this through with Disney looking around because honestly, Disney doesn't own Disney's never been great at making games directly, first party. It's just It's not a pro- It's not a strength that they've built up internally. Yeah. But in some cases, I would argue that one of Disney's biggest competitors is Nintendo.

In a weird kind of way, for like hearts and minds and like if you're talking about companies that parents trust with great kids IP, great kids shows, great things for kids to do, it's hard to argue that Nintendo is not easily in the top five. I will uh I will agree as long as we caveat that when we say Nintendo, we also mean Pokémon. Sure. Like like that bundle of like Nintendo/Pokémon cuz like Pokémon I think Disney Disney would love for any of their IP to be worth anywhere near what Pokémon is. Cuz Pokémon is more valuable than Disney. And need people to understand that just real quick to to talk about
know. Is Pokémon more valuable than Marvel? It is the single most valuable IP in the world. And has been for some time.
that ranked exactly that way. Yeah. There There It's It's absurd. Well, also um Pokémon does really well in a bunch of international markets that a lot of Disney stuff doesn't necessarily, and

vice versa. They don't have great overlap except like in the States where they're competing for a lot.
you know, if you were arguing for basically top beloved conglomerates that parents like, Yeah. Disney and Nintendo would both be in the top five, I would say, worldwide. Yeah. Like And I'm I'm I'm actually struggling to think of a three, four, and five that come anywhere near Nintendo and Disney. Um on scope and scale. Yeah. Uh the closest I The The only thing I can think [clears throat] of is DreamWorks, but that's like dis- That's like a distant DreamWorks is like How to Train Your Dragon, Kung Fu Panda.
owned by I don't know who owns DreamWorks. But like it's It's in the conversation, but it's not nearly as um Mhm. not nearly as big. DreamWorks Interactive is

I think they're in Oh, it's part of Viacom. Okay. Yeah. Cuz for a while, they were associated with Lucas, I think. LucasArts. I thought they might have been for a bit, but yeah, it they They got They got bought a while. Yeah. Anyway, not But like we're struggling to find the relevance of anything, and DreamWorks is the closest I can get to that conversation.
are big other ones, but if you're talking about like big huge worldwide brand Yeah.
kind of thing that operates across a variety of medium, Yeah. um Nintendo and Disney are it. And again, we're probably missing something, sure. But even if there were another two of equal to that, that would still put these all in the top four. Right. So, if you think about Nintendo and Disney, and I'm pretty sure Disney does consider Nintendo a major competitor. Sure. And the same I'm pretty sure Nintendo does

for Actually, I don't know if Nintendo considers Disney one because of where Nintendo operates. I actually don't know. I'm going to go one further. I think that Nintendo may be so in their own silo and in their own lane that they don't care about competitors. Like which is which is such a weird thing to say, but Nintendo do as Nintendo does for like forever. They're just going to keep doing their thing, and if people like it, great, and if they don't, they'll do something else, but like they have not cared at all about what anyone Yeah. Yeah. But again, so if you're Disney, and you're looking at, you know, you have Disney Plus, you have all these great movies, you have Star Wars and Marvel and all of your own IP and all these TV channels and stuff, and but you look at where Nintendo was strongest Nintendo one of Nintendo's biggest strengths is their video game division. They're first party. They're we make great games. We are an essential part of the game industry. We have our own console, which means therefore we have a

whole bunch of people that come to us and they want to put their games on that. Right. We have approval rights on those. We get royalties from every game that comes out on a switch or a switch two and everything going back in their big library of digital games. Yes. They have and just I mean from an advertising aspect alone, Pokémon also brings in a lot. So, but wrapping again, the Pokémon and Nintendo together oh, trading card games, you know, all video games all the above. They're one of their strongest point places is where Disney is the weakest. Yes. Which is kind of Disney doesn't have a console. Disney doesn't have first party great studios that go out and put, you know, any first party Nintendo game pretty much hands down is always going to be amazing. Yes. That is a thing they're known for.
Yep. And as people and kids more and more want interactive entertainment Disney is missing out a key part of that. Yeah. That being said, Disney a couple years ago

made a huge investment into Epic. Yep. Well, let's talk about Epic. Yeah, so when we talk about Epic Games specifically, I saw someone who wasn't sure which Epic we were talking about. We're talking about Epic Games. Um, we're going to classify three lobes. Three like big big lobes.
Okay. Pulling back. Epic Games started as a development studio. Yes. Um, that made a couple of games. Um and they specifically made a game called Unreal. And the game they made for Unreal was to show off this new game engine they made called the Unreal Engine. Yes. Unreal was a great game, but it was also a tech demo will for their engine a very long time ago back when there were very few commercial engines.
Right. They were one of the very first commercial video game engines. Mhm. And they had some very very good people working on the tech for those. Yes.
legends in the industry. Yes. Unreal since has gone or Epic is the

studio that made Unreal and the Unreal Engine. They went on to make more games, but also to continue to develop their game engine. And the Unreal Game Engine along with Unity are the two biggest video game engines in the world full stop. Yes. I believe they account for probably if you're looking at like commercial big commercially released games, they probably cover 90% 90% plus of those. Right. We're running to the point where you don't go make your own engine unless you have a very specific need to. Right. Because engines take a long time to make and more importantly, not just the engine, the tools around that support your development team for making things on the engine. Yeah. One of the biggest advantages to both Unity and Unreal is not only are they great engines, but they both had 20 plus years of the teams making tools for the developers who not just use the engine, but the tools to use the engine for art pipelines in and

design and graphics and the Unity and the Unreal stores and just everything around supporting it, the ability to port onto the PlayStation and the Xbox and to web and to mobile and it got like there's really good stuff you get with that that if you were going to make your own engine you would still have to go make all of those things as well. Yes. Also, noteworthy when we begin talking about Unreal is that uh the Unreal Engine is not exclusively used in uh anymore, yeah. Yeah, in video games anymore. It is also used heavily in film and television. It And there was a big philosophical split. Mhm. Unity for a long time said, "Our we will have easy to use tools and we will port to everywhere." And Unreal said, "We will have the best graphics." Yes. That was the kind of split. Over time, Unity has taken Unreal has taken on some of Unity's things. We

will port to better places and have great tools. And Unity said, "Oh, yeah, and we'll have better and better graphics." So, they're slowly going to overlap each other more. Right. But, if you're going for the highest fidelity graphics Unreal is the thing to the point where they now make Marvel and Star Wars movies using the Unreal Engine because it's easier to do parts of that than it is just to make straight kind of different versions CGI. Yes. A lot of the scenes in The Mandalorian were done using the Unity Engine. Using Unreal. Using the Unreal Engine.
Other U.
Thank you. Unreal. Too too many of them. Right. Okay. So, that is a relevant part of this conversation, right? Is that that Disney for all of its stake in film is also using the Unreal Engine for some of their properties and has an interest in the continuation of this tool that their process or at least a for a large number of their studios uh depends on, right? So, that's that's part one. Some of their highest tier properties Yeah.

The movie they made is yeah. The Mandalorian prints money. Um All right. Thing two. The Epic Store.
Oh, um really quick um where was it? Uh Godot's getting popular. Yes, Godot is absolutely a popular engine, but compared to Unity and Unreal for market share Yeah. is still tiny. Yeah. That does not mean it will not grow to be a bigger and bigger thing over time. Yes. It it is one of those things where um and this happens with Linux gaming a lot, too. Yes, those things are absolutely on the rise. We have a disproportionate exposure to Godot and to Linux gaming here in our community because we have so many people who are so invested in those ideas. Yeah. We have a disproportionate exposure. They are still as a total percentage small, but are absolutely growing. Um And it's it's good to have competitors. I am glad Godot exists. I'm glad Godot's doing what it is. I love their philosophy. I love their open

sourcey stuff. It's great. Two thumbs up for Godot. Yeah. But, again, just talking about kind of the world as it currently is, Unity and Unreal are the giants in the space. Yeah, correct. Um, okay. So, the second big thing that uh Epic has is a thing that a lot of people dislike. Actually. The Epic Store. They have already a the I would say it's either the second or third biggest online digital storefront for video games. Mhm. Behind
Steam
PC games or video games? Uh
Because like we also have things like the Xbox store Yeah, I I would say Nintendo store and the Sony store. Yeah. Okay. But, they could make it to I'm reasonably confident they could make it service other forms as well, right? Cuz it's just a key at that point. You just tie a thing to it and you establish a key. Anyway. Um the Epic Store is another thing they have, right? They have So, they have the Epic Store. It's already built. It's not

great, but it does exist and does have a user base that Epic has spent a absolutely ludicrous sum of money acquiring over the past five or six years. A while. A good long while. It's one of their strategies for this that because they make so much money from thing number three that we're going to talk about in a second is Unity excuse me, Epic has for the Epic Store been giving away a game a week every single week basically since they opened the store. Yep. If you go to log on, you can go claim your free game every week and just like Steam it build goes into your library and it is yours forever. Yep. They have been using this for user acquisition for a while. And honestly, if you play games it's hard to argue with this store is giving me free games every week for a while and they've built up a sizable group of people who now exist in that ecosystem. Yep. And for the devs whose games they're giving away, those devs get paid. Yep. So, like from a developer perspective,

being on the Epic Store with at the deals they give you and in some cases the giveaways has been a a life-changing experience for their studio because it has gotten more people into their gaming ecosystem than they otherwise would have. Right. Yeah. Uh All right, let's talk about the let's talk about
engine, okay. Engine, [clears throat] storefront and of course the big the other big thing Fortnite. Mhm.
[clears throat]
Sorry, Forknife? Yeah, that's right. Forknife. Yeah, that's it. Uh-huh. Yeah, 100%. Um, it's utensils. Now, um Fortnite is in a weird spot right now, but we're going to talk about why that weird spot is even weirder than it may seem on the surface. Um, Fortnite is largest Battle Royale in the world. It still has
That's one of the biggest video games in the world. One of the most recognizable video games in the world.
Yes. A giant tech demo of Fortnite. Yeah. Inclusive video games in the world. Yep. Nowhere else can you have Batman fight Deku using the Kamehameha wave from uh

Dragon Ball Z. The crossover
in and the K-pop demon hunters. Yeah, right. Exactly. Um, as Superman shoots someone with a sniper rifle. Uh Right.
As he does. Right. Yeah, you know, the Superman thing that he does where he headshots people with a sniper rifle. Superman. Um But, jokes aside
Did you see the most the most bought skin recently? No. It was um oh um Crap. What what's her Oh, one of the um One of the demon hunters? No, um one of the one of the pretty celebrity girls who's been around for a while.
Sabrina Carpenter. No, though I'm sure she's near um I thought you were talking about the There was a Sabrina Carpenter skin recently, which is, again, What? They They sell sweaty skins um which um Hold on. Yeah.
I'm going to look this up while we're talking.
Right. Okay, so but
[laughter]
individual circumstances aside, Fortnite

has a is a cultural icon? Question mark? It is a known thing.
Yeah. Cultural juggernaut at this point.
Yes. It is a thing that everyone else is at least tangentially aware of, even if they don't participate with it. Right? It is a thing that makes money. It is the cause of the Epic v. Apple lawsuit, that whole thing, right? It has been um It It's been going for forever. It doesn't have the user base that it used to, um but it also weirdly is somehow less problematic than Roblox. Uh Well, they don't pretend like on that level.
That's true. Um Oh, I was The one I was thinking of, by the way, um uh Where'd it go? Kim Kardashian. It's not number one anymore. For a little while, the I'm in a league
Fortnite skin?
Kim Kardashian skin, last time I checked, was number one and I was just

mildly shocked for a variety of reasons. Yeah. Um So, the And
Hold on. Okay, chat, I'm linking, but um Yeah. take it with a grain of salt that um this is kind of a salt
of salt. Yeah. The uh The other important thing to note is that there are already a lot of things from the Disney milieu, from the Disney silo of content, that have made their crossovers into Fortnite, right? That Pretty much every Marvel character has had a crossover in Fortnite, right? Like that's a thing.
Wars character. Right. And Star Wars characters and other things that are like in in Disney's um wheelhouse have made it into Fortnite and are have been Fortnited-ified. So, they've already got an existent relationship there. Yeah. Oh, actually, they have a couple of existing relationships. Yeah. Um so, but

yeah, like all of that Disney is used to working with licensing IP. Yes. For those who don't know, an IP, intellectual property, is like Star Wars is an IP. Darth Vader is part of that IP. So is Luke Skywalker, so are Ewoks, so are Stormtroopers. Wolverine is part of the Marvel IP, along with Cap and Iron Man and all of that like Yeah. They have a lot of IP they're used to working with. They're used to licensing. Fortnite is the the one game that every that has been that very early on was like, "We want all the licenses." Like we don't care about our own We don't have our own fiction in the same way. We bring in everybody else's.
Right. Okay. And Disney invested Mhm. a ton of money into Epic. Quick note, Epic is not publicly traded. Correct. You cannot go to the stock market and buy shares of Epic in the same way that you can of Disney. That does not mean that you um Disney That does not mean investors

could not buy part of Epic.
Right. Epic has continued to sell to investors pieces of itself. And how much did Disney invest in Epic? One and a half billion dollars was their stake in 2024. Okay. So, they put 1.5 billion dollars into Epic for not a controlling stake. Like Epic is valued significantly higher than that. So, Epic still controls itself. Mhm. So, And I'll go ahead. Um Oh, I had a thought. It's a good thought. Nope, it's gone. It's fine. It'll come back. Yeah. Um and So, kind of moving a little bit on to this, Disney has already invested money in Epic. They want They will. I'll go ahead.
want to get a return out of that investment. Yeah, so I'm going to take off my game developer and
[clears throat]
hat for a minute and put on a different

hat. Will, I've run a couple of small studios, like that of companies I've made. One was Experiment 7, which is a game studio. One was EEDAR, Electronic Entertainment Design and Research, a video game research studio. Um other things, too. Snow Canyon, couple of others like that I've owned or I've helped found. Sure. Like I am a serial entrepreneur by some definitions of the word. One of the interesting things about starting a company is for a lot of people, a thing you start and build is the exciting part. But you don't necessarily want to do it for your entire life. You might be like, "Oh, cool. I built this thing." That was 10 years ago or that's been the last 10 years. I'm ready to build a new thing. If you're an owner, there's very few ways for you to stop doing what you're doing short of hiring other people to replace you or selling your company. Um Acquisition is one of the things that

people who start a thing often think about. "Hey, I built a thing. Wouldn't it be nice if somebody paid me a whole bunch of money for this thing I've built." Yeah. Epic Games, which um was founded by Tim Sweeney and a couple of other people more than 30 years ago, is still private. Yep. And it's They have talked about for a long time wanting to get sold. A lot of the people who work at Epic have been given shares of Epic that they can't sell yet because the It's not a publicly traded company. Right. Which is an interesting thing when you think about it. Yeah. You own part of this thing. Can I trade it to anyone? No, but you own it. You have it. It's yours, but it doesn't do anything until it's sold.
weird ways to sell pieces of that on the private market. Yeah. Um it's very complicated. We won't get into that. Like there are ways for people who own pieces of it to

sell pieces of it, but it's not as easy as going to your broker, you know, brokerage account and being like, "Hey." Right. I want to execute this sell order. Yeah. It's not liquid. Yeah. So, Epic's not a publicly traded company. Mhm. Epic has been taking investments, groups like Disney. Epic has been giving stock options to employees. Yep. Um When you sell to investors like Disney and other groups, and again, this is my studio hat because I've been in situations. I've learned a whole bunch about this. Your investors eventually want to get paid out. Mhm. Like that's part of investing. If you put a hundred dollars in, you know, your friend's startup, at some point Well, let's make the money stakes feel harder. You put ten thousand of your hard-earned dollars into your friend's startup. At some point, years down the line, you're looking at that, you're like, "Hey, Bob, you know, that ten thousand I put in your startup a while ago?

What's happening? Like eventually, you know, do I get that back? Do I get more than that back? You know, like Do I get like a crisp handshake and a thank you? Like where are we at with this? What At a certain point, that money you put into your friend's startup, you're like, "I'd like I'd like to be able to do something with the money because when it's in there, you can't do anything."
Right. So, groups like Disney and all of the other groups that invested have most likely been putting pressure on Epic to go public, and Epic has already wanted to go public. Yep. Um Let's see. So, there is, you know, a dividend if you're an investor. Not every privately held company does dividends. Yeah. Um some do. Just straight up. But um not every privately held company actually has the revenue because if you issue a dividend, you're taking money out of your company. Not every company is profitable enough to actually do dividends to investors. Some are, some aren't. Some companies will

Like let me take a great example. The research studio I helped found got to be pretty big. We went from two people up to 70. And we eventually sold to a group called NPD, which then later that NPD group got acquired. We were profitable, we weren't super profitable. And the only way we were ever going to scale to get big enough was going to sell to a conglomerate that could take what we did and do it in scale. And so, like we ended up selling our company. And we ended up getting in with that because they took all of our employees, they were able to take what we were able to pay them and move them to corporate pay. Right.
Which was great. All of our employees got pay bumps. They all got better health care. They all got stock options in a bigger thing because this company was able to take and scale what we were doing. So, like everybody did well. And we got to pay back all of the initial people who invested in our company 10 years earlier and pay them all back with interest, which was great. But like something we didn't make enough money to

actually be able to do dividends because it was a not a huge margin kind of business. And so, there are groups like that. Um it's an interesting thing, but I think Epic has probably been getting a lot of pressure on them to sell, and they also internally want to sell. And I'm pretty sure Tim Sweeney, the remaining big founder in there, would also like to sell. Like I think Epic has a lot of reasons it would like to get um bought. Yeah. I I I think I agree with that. There have been some uh Chat's got a bunch of individual theories. Um Oh, let's see. Uh Sorry, I was I was monologuing, so.
No, no, it's good. It's good. So, there are Oh, actually, for those unfamiliar with things in the US, we had good healthcare options. Better healthcare as a US as a perk in the US is a um is a thing. Yeah. So, um yeah. Oh god. Capitalism hellscape. Uh okay. So, so there are there are elements on both sides of this, right?

Lots of people are also thinking about it from the Disney ver- from the Disney side. I also I also think that that's probably because of the way we phrased the title. I think if I had phrased the title as why Epic wants to get bought by Disney, we would get very different responses, which is very interesting. But, that's a whole different psychology lesson. So, Yeah. Felix in chat brought up the idea of uh like a small example, right? I'm going to call it a small example. It's not really small, but in the grand scheme it's small. There's a thing called ArtStation that has a bunch
Oh, yeah. of art of of game assets and is a game library, and that might be a kind of thing that uh Disney wants control over either to feed it into their new AI. Of note, uh we're recording this on the 9th of April. The Sora deal fell through last week. So, that is a thing that Disney has been in the news for um in case you're unfamiliar, the very short version. OpenAI had a um video

generation um engine called Sora. It got shut down because it was burning through about a million dollars a day and it never been profitable. Disney, as a result, pulled a billion, that's with a B, dollar investment out of OpenAI. Which they put into allowed Strangely, they'd paid OpenAI Yeah.
to allow OpenAI to use Disney-licensed characters. Correct. Very strange. Um Well, actually, my thought honestly is the billion they stuck in was probably valued higher because part of the what came with that was the ability to generate Disney assets, but
I agree. Anyway, we don't think that Disney's out of the AI game. We think that Disney just didn't like the way that OpenAI was doing it. Um and so, they're likely looking for other assets and other ways to throw stuff into uh their own engine, and that makes sense. But, that's and that's a small example, right? That's um an example of Disney taking a specific individual asset, right? The ArtStation

library, and eating it into a new usage, and they get that as part of the overall bundle deal of buying Epic. But, let's let's look at the the what I would say are the the big reasons. We I think we have slightly different big reasons. Yeah. And then we have like one kind of cooked a little tin foil hat thing that I think we agree on. So, And by the way, this is all speculation. Neither of us have zero Neither of us have any inside knowledge on this, but you know, we're we're just kind of looking at the landscape. We're looking at their competition with Nintendo. We're looking at what they own. We're looking at the way the industry is moving. We're looking at how uh popular and influential video games are at this point. How Disney has a lot of video games, but does not have the hardware. Yeah. Um the kind of back end or let's just say they don't have the industry cloud in video games than Nintendo does. I agree. So, full stop. Yeah. So, part of it is

um the that Unreal Engine. So, there is a kind of power that they would get in their existing investments in the film industry if they exerted more control over um Unreal Engine. Now, I don't mean "Hi, we're Disney. We own Unreal Engine now. No one else can use the Unreal Engine to make movies." Not what I mean. Yeah. I want to be very clear about that. I don't think that Disney would DO LIKE THE "HAHA, no one can use this but us" thing cuz that is not a good move long term. Also, tends to, depending on the current political climate in the United States, get you investigated for trust stuff. Um no, what I mean is Disney says, for instance, "We believe that this new piece of technology in filmmaking is the way forward, and the rest of the industry disagrees with us. Well, that's tough for the rest of the industry because we believe that it is a priority

for Unreal Engine to make our thing first. Yeah.
that makes our movies the way we want to make them, we are going to direct Unreal the Unreal Engine team to make that the priority, right? That is a kind of control and power over the film industry that they would have in spades if they were in full control of the Unreal Engine, right? And honestly, that use case is actually probably small. My thought more on that, there's two other things that I think they'd get out of owning the owning owning the Unreal Engine. Um number one, they have security, which is for the moment, if we assume that most Disney movies and most um Marvel movies, excuse me, most Marvel movies and most um Star Wars movies, there we go. Are made using the Unreal Engine. Owning that, knowing that it will not suddenly ever be cut off, Yeah. be sold to another competitor who actually then

might do a cut off. True. The defensibility of owning that means that they know it will never be taken away. Because there is a world where Epic gets bought by somebody else. If Epic wants to get bought, Yeah.
at some point Epic will get bought. True. And if you're like, "Okay, we use this technology to make this whole slate of our most biggest and most popular and most um movies that make us the most money, Yeah. making sure that you will own the tech and never have it taken away from you Yeah. is a very defensible move." Yes. I think that's a very good point that I had not considered.
Extremely defensible move. And the other is it also gives them We'll talk about the hard power. It gives them a lot of soft power. "Hey everybody, we bought this and we'll continue to make Unity the best thing for, you know, making films of high Unreal. The best thing The fact that both start with U's and are roughly the same length does our brains zero favors." Yeah. Uh-huh. Right. Keep going. But, yeah. The fact that they

would then own the Unreal Engine, be like, "Hey everybody, you know, things are going to change. We're actually, you know, you know, up their dev budget by 50% to make sure that even more stuff gets put in there that everybody's going to be able to use to go make amazing things." Like, the amount of soft power that gives them in Hollywood Agreed. is amazing. Because, you know, "Hey, they own ILM, one of the best special effects houses. They own, you know, the the Unreal Engine, one of the like the things that they will own that other people can basically either just use or pay to use Right. are really good for the industry. And I think a lot of people would say Disney will be a good steward of something like the Unreal Engine in a way that say Jared Kushner's hedge fund wouldn't be." Yes, correct. Yeah. Like, there were groups that could buy it that people would be, "Oh, no." Right. And I Yeah, I I agree with that. I think that that that covers like their Unreal use case, right? So, so the Unreal Engine is

definitely one of the three parts. Um let's talk let's talk Fortnite next cuz I think that one's kind of straightforward-ish, and I actually think at the Epic Store is where we'll we'll probably go last because I think there's a bunch of weird considerations with that that we'll get into. Fortnite is pretty straightforward. Yeah. It is a large video game. It is actually in decline currently. Um not like, "Oh, no, it's closing tomorrow," but Fortnite has peaked. Yeah. They you know, you can check out their users over time. It is slowly going down. This does not mean like, this happens to every game. Fortnite could theoretically do a thing that would drive them back up. Some games have continued to stay relevant for Actually, Fortnite has stayed in relevant for a surprisingly long time. Um Fortnite has a whole bunch of other modes. We found out that Fortnite roughly had 3,000 people working on it because there was recently

a layoff of 1/3 of the Fortnite development or 1/3 of the Fortnite staff. I won't just say development cuz it'd be worldwide, which was 1,000 people. So, you can figure out that that meant that there had been 3,000. [clears throat] Um I I I think uh Christopher Walken's got a really good point that I do want to address from over on YouTube um that Fortnite's trying to transition into a UGC platform.
Yes, they are. Okay, that yes, comma but. They're not doing the best job of it. And I don't think they're there yet, right? I think they are cuz we don't hear the news, but like, in the same way that there's a lot of There are now groups in Roblox making stupid amounts of money on their games that they've made, policing children. Um Yeah. Uh-huh. Correct. Yeah, let's not forget that part of Roblox. Yeah, keep keep going. Um Fortnite skews to a slight to an older audience of teen plus, Yeah. and there are creators in

there also making what I would say are staggering amounts of money considering the size of the shops or the game modes they've been making. That's true. This is a thing uh Epic has been investing in, and it may not be huge yet, but it's big. Yeah. And I think we just don't play in the circles that bump into things like that. Yeah. And I think that um I I don't know if Disney really wants the Disney has long had a problem with media that they don't control, right? User-generated content, UGC, is media that like is in your space that you don't really control, and they've had a pretty hard time with that in the past, largely because every time it happens, Disney's family-friendly stuff gets less family-friendly with a quickness. Or
But, this is also why they have sub labels. Yeah.

So, Disney has imprint movie imprint labels, for example, that put out PG and R-rated games. They aren't put out under the Disney label, they're put out under, you know, the Searchlight label or
Yeah. something else. That's true.
And I would say Disney would be more squeamish on that, except recently that billion-dollar stake in Open AI for image inter- image generation was specifically to let people use AI with Disney characters. Yeah. So, they may have had some thought changes in there. Yes, they have a huge brand and a reputation to protect, but they also see some of the future. Yeah. I I think that's true. Sorry. Cat doing weird things. Be right back.
Yeah. Uh I also do agree with Dogbert, right? That this is a good point. They might be interested in it, but I I think it's I think the Fortnite name and the image of Fortnite is more important to them as a whole,

right? Like just being able to say Disney's Fortnite is probably worth more than any individual game mode crossover component, whatever, right? Like they might just be viewing it like holistically, or as like we just want Fortnite as a whole, right? Um so I think that that's that's a thing. Um that that is that is worth noting here, too, is that we are also I I feel like we get sometimes a little granular with some of this. I think that it in some cases, it is much easier for Epic to just Okay, yeah. I'm going to I'm going to use a movie example. Everybody's seen Inception, right? There there's a scene where they need to get um in they need to buy out the first-class cabin of a flo- of a specific flight so they can do their dream heist. I've now

made Twitch chat very happy because I've mentioned the word heist in an official stream, and they're all very happy about this. So, the person in the group who has a truly ludicrous amount of money simply buys the airline because it is simpler. I do think that like we can get kind of granular with this. I I I think that we should also keep in mind that like some amount of there is a point of granularity where like it just no longer makes sense, where um the it is simply simpler to buy the company, right? Like they could license individual parts to try and do a long-term partnership with Fortnite or do this or do that or do whatever, but like just buy the company, right? It will be more straightforward. Um so, I think that that may be a thing that we are uh occasionally getting to in the weeds on, and I do want to acknowledge that as as

we talk about it. So, that's that's Fortnite. Fortnite is a big-name game that has a bunch of cultural cachet that Disney could work through, in with, and increase their brand
didn't So, sorry, because I was chasing my cat. So, in going with that, part of the way licenses work, so Disney is licensed Disney gets money from all the Disney skins and the Marvel skins and the um Star Wars skins, etc., in there. So, that money goes from Fort- Fortnite Epic over to Disney for licensing fees. If Disney buys that, just again, for some of the way it works, it still passes around between things, but they're basically capturing all of the money from all of those, even though it's going down chains, and it makes it even easier for them to license their huge back catalog of the rest of their IP because they're licensing it to

themselves. Right. Like it's a well, of course we're going to put these other things in. So, there's some extra monetary incentives for them to do that, or to take other properties they have in there. Like Fortnite has the Fortnite has been making tools for people to go make games. What if they're like, "Hey, everybody, cool. Use these to go make some sports games because we own ESPN and all of these licenses here around sports, or all of these other movie things that we haven't talked about. Like the fact that they own a UGC platform also means that they've invested heavily in tools to make things, and you could theoretically bring in large swaths of your user base to interact with properties using Fortnite in ways that they haven't before. Yeah. So, it's like it's it's a
It's potential. Yeah, it's a novel it's a it goes back to that bundling thing we were talking about earlier, right? That there's like this bundling idea, and that they get to make new bundles in new ways out of existing stuff that they

have with this new shiny method for using it and reaching users and getting them into their ecosystem. Yeah. Right. Which brings us to our to the last point, which I think I don't think we've ever cooked this. I think this might be the reason. Okay. The Epic Games Store. Boom boom boom. Is I would say probably Steam's strongest competitor. Mm. GOG's up there, but doesn't have um Again, this is a lensing problem where we have a lot of awareness of like GOG and Humble and some of the other and some of the other stores because they're in our circle. I think that outside of our gaming circle,
If you were to walk through your random Target store Right. and asked 100 people there if they had a Steam account, an Epic account, a G- L- GOG account or

a Humble account, I think you might be surprised by the rankings. Same as if you went to your local mall and walked through, or if you walked into a GameStop even. Right.
Like people who like are hanging out in the Target or the Walmart section with video games. Yes. Yeah. Um so,
[clears throat]
that is valuable to them because they need if they're going to take on gaming, and if we believe that they are uh rivals with Nintendo, they should take on gaming. Mm. Or expand into gaming at some point.
Correct. More Excuse me. Expand more into the ownership. They have plenty in gaming. They've done a lot of licenses. Right, but they don't Yeah.
Yeah. Yeah. Th- They're going to need a singular place to do this, right? And we can see their methodology here in Disney

Plus. Disney had a period of time where like stuff was all over the place, and they had the Disney Vault and the physical media and the everything else, and then finally Disney said, "Screw it. We're going to make our own thing."
One destination.
One destination, one thing with all the stuff for all of your subscriptions, right? You can get you watch National Geographic documentaries, you can watch ESPN sports highlights, you can watch the current Disney Pixar movie, you can watch whatever, the classic Disney catalog, Yeah. all
Star Wars, all your Yeah.
Right. All the TV all the exclusive TV only available on Disney Plus. Right. All in one digital destination. Yeah. And I think that that is if that is their methodology here, that the Epic Store makes a perfect idea for their acquisition there. To have a ready-built I'm just going to say, and this gets blamed on Netflix. Yes.
Netflix saying, "We're bundling games in with our subscription." Yeah. Even

though nobody particularly was interested in Netflix bundling games in with their subscription,
Yeah. or the bar that it takes up. Right. Or that I'm I'm kind of interested in this. Can we Can we real quick, chat? If you've um if you have ever played a game through Netflix, can can you do like a checkmark emote or a thumbs-up emote? Or have you ever played a video game through Netflix? Cuz like you're not the target audience, right? This is another case of like not the target audience, right? The The target audience is uh probably your parents, your grandparents, right? Like Okay, so like some, right? But not a ton, right? It's not It's not a primary feature, but it is a thing that's there, and if you're bored enough, A little bit of tea in this, just because I happen to know people. The group that in Netflix went into equivalently do the cool stuff bumped into Netflix's culture, and eventually got booted in um cuz Netflix

is not used to the development time of games and putting them on, or monetizing games. They basically Netflix was like, "Yeah, let's be able to get make AAA-ish stuff and give it all away for free and to keep people engaged and paying the Netflix subscription." But they weren't interested in offsetting costs of say like bundling in DLC or doing free-to-play or other things. Yeah. This division then started losing money, and Netflix is like, "Hey, why are you losing money?" And they're like And so, there've been a couple of leadership changes that have gone away from actually kind of the cool idea that was initially made into what it is right now. Which is Android games that you launch through Netflix. Mhm. Essentially. Yeah. Um
And it could have been done all It could have been done a lot better than where it ended up. Yes. Uh Um And and yeah, so Disney has this great destination.

Disney already has a subscription to that where you get a whole bunch of stuff. If Disney owned Epic and the Epic Store there is a lot that you could kind of push in together with that because they would still You're not going to see the Epic Store disappear. Like it's way too valuable. But for example, that free game you get every single week might be Oh, if you have a Disney Plus subscription, you get a free game every week. Or hey, all these backlog, you know, Disney and Marvel and um Why do I keep for Star Wars games that you know, now sell for like $2 on Steam? What if we just included those all with the Disney Plus subscription? Oh, you want your KOTOR? You want your, you know, X-Men arcade game and all of these old like The amount that they could just kind of put in for free Consolidate.
track of with the consolidation. Yeah. You could do some really If you owned this and you were big corporate group, you could basically

make that Disney Plus subscription even more valuable to keep get even more people subscribed or keep them subscribed longer. Yeah. I mean, hell, you could be like a $10 store credit in the Epic Store for every month you're subscribed to Disney Plus.
Right. Something that essentially just lowered their profit margin but allows them to remain profitable, right? Cuz $10 is in the profit margin. Right? Um And And yeah, I think it's almost because they're giving it to their own thing.
Right. Yeah, they're giving it to themselves. I think that Demonware has a really great point, right? They have Disney parks have many parts to them, right? And or like sub parks within, right? But like Disney as a whole is like this big thing, right? Um and I think that this this squares with we want all people coming into our ecosystem into our system, coming into our our world and staying there. Right? Because the other thing that
long as possible.
As long as possible. Cuz the other thing

that Disney is, I think, figuring out and I think they know this from park design and I think they know this from a lot of things is the longer you keep people in an ecosystem, the more money they spend. Yep. Right? The longer they keep you in the park, the more money you spend. And there are lots of ways that Disney is very efficient and effective at making your experience in the park as nice as possible to keep you there as long as possible. Like the the amount of technology that Disney has put into managing lines, wait times, rides, trash, uh cast member movements, all of that is bonkers, right? And so, in the same way, I think they want to keep people into the in the Disney Plus ecosystem in there because if you get used to playing the old KOTOR games or whatever, when they release the Epic exclusive new

Unreal engine, you know, defining Grogu and the Mandalorian game that you can own that you get a week early if you buy it through your Disney Plus subscription, they'll make money hand over fist. Ooh, I would I didn't even thought You could give it Let's say or separate thing. You know, here's the 10 exclusive Fortnite skins that you get by being subscribed to Disney Plus that stay with your account as long as you're subscribed. And it's not the first time we
sorts of weird things you can do when you own all of the different pieces. Yeah, like uh the Game Pass did a if you have Game Pass, you have all League champs unlocked. Yeah, Xbox and League of Legends did a deal where if you hook up your Xbox Live Pass to your League account, as long as you stay subscribed to Xbox Live, it unlocks every single League of Legends champion, all 160 or 80 or whatever Some number of them at this

point.
Yeah. Like you get Some of these deals just get people in and they're like, "This is too good to leave." Right. And so, I think I think that that is that is the big part is that while there are other there are valuable parts to Fortnite, there are valuable parts to this. I think the big thing uh and like it's not necessarily the current user base of the Epic Store, it's the technology and the team to run a store front. Yeah. Right? That is already
Disney could go build that. But the amount of money they would spend building it and time building it and expertise and then trying to get all the games on and the licensing deals and everything else. Like if they just bought Epic, they could have it tomorrow. Right.
And the fact that they've already invested $1.5 billion into Epic Right. would also make it weird for them to go make a competitor. Yes. Yeah, why would why would they go with anyone else when they could just say, "Hey Epic, we already gave you 1.5 billion. How much for the rest?"

Mhm. Right? Or, you know, knock the 1.5 billion off the sticker price. What are we getting? Right? I think that though I think that that makes a compelling case, at least in my mind, is this whole idea of expanding their digital reach, right? Establishing themselves as a single-stop digital destination, right? I think I I I genuinely think that they would love to be the default button on the remote. Have Have you Have you
[clears throat]
bought a television recently? Well, actually, I bought a Roku recently. One of the default buttons on a Roku is Disney. And the other's Netflix. Yes. Right? Well, they're doing their own smart bundling licensing deals themselves. Correct.
They go, "Would you like a button on our remote that just takes people right to your service?" Yeah. I think that that would be I think that that is their ultimate goal

and that the idea is that you are so deeply enmeshed in their ecosystem that you turn the television on in the morning or your child, right? Whatever. Let's Let's assume that you have a child who's of an age to be watching Disney properties. Yo. Great. I think the world that Disney wants you to live in is that you can turn the television on, set it to the mode for the kid, and just that kid is fully entertained and enmeshed in the Disney system because much like Joe Campbell, you hook 'em young, you've got 'em for life. Well, and actually, one of the interesting things about that is I think one of the reasons Disney bought Star Wars and Marvel is they wanted to extend the life of the people who watch their stuff. Yeah. You only watch Mickey for a certain amount of years or DuckTales or Animaniacs. I mean, you might go rewatch some of them because they're freaking awesome. This is This is a little dark. Someone here says, "My son literally said, 'That's the wrong button' when I accidentally went to Netflix instead of

Disney Plus." Okay, so it's working, right? It's already working and this would just make it faster, right? But the My son already knows the difference between, for example, YouTube and Disney because Disney's where we go to watch Bluey. And the other thing where YouTube currently is where we go to watch Numberblocks. Right. Yeah. So, I think I don't know. I feel like we've made a compelling theoretical case, right? That that there is a a bundle of things that fit into this idea that Disney is missing something in their media empire, right? Mhm. And we're not saying it's going to be great for the industry if this happens, but I think you can see why from Disney's perspective it makes sense to make this acquisition. Um and why why we're giving the rumor some credence, right? Cuz I think it's really easy to be like, "Oh, that's just a rumor that a tech reporter talked about, right? There There's no way that they're actually going to do that." I I don't know. I feel like this is

reasonable, actually. And And actually, we promised to talk a little bit about the takes. So, here's part of my take on this. Epic wants to get sold at some point. Straight up. So, that means they are going to get sold at some point.
Right. Like, okay. Taking that as a thing that is going to happen, Yes. our question is now, who would we like to buy Epic? Right. And if you phrase it more like that because like, here's a thing that's going to happen. Okay, what's our best What's our best win case out of this? Right. You know, It's definitely not venture capital. It's definitely not venture capital, right? Like
want the same group that bought and is dismantling EA to go do that to Epic. Right. Like, there are only certain groups that you think are going to take it and at least try and do I mean, you can hope for positive, but let's just say, you know, neutral plus.

Like, Disney to me is one of the best cases of a group to buy it Yeah. because I think their interests align in keeping almost everything Epic is doing going forward and being industry positive. I I will I will say that there might be an industry positive thing, which would be great for everyone who doesn't like the Epic Store. I think if you don't like the Epic Store and you are a big fan of Steam, you want someone who wants the Epic Store to be improved to buy the Epic Store because that will force Steam to improve Steam. And that is what I think a lot of people want. Um because if Disney buys it, right? Yeah, Tencent and the Chinese government are absolutely 100% agreed the worst case is given their track record.
of bad cases of groups, but again, this is going like Epic wants to get bought. Yeah. Therefore, Right, they're going to. They're going to. Right.
So, where's our best landing? Yeah, and

I think I think I'm on board that Disney is probably the softest landing for the for the industry. I think that For the industry the way I want it to run. Yeah, yeah, for sure, for sure. Um and that's not to say it's going to be smooth, right? Like this did What if it couldn't blow up? Right, every every time every time there's a merger or acquisition in the industry, stuff happens and people lose their jobs and there are layoffs and IPs get pigeonholed for forever and you know, there are all kinds of things. We're not saying this is going to be easy, merely that I think we've presented a case that this is a reasonable line of action for Disney and that it would be not the worst thing possible for the consumers. Yeah. And like this is a really great comment, too. You know, where do we draw the line on what gets bought, who buys it, etc. In an alternate timeline or in a different future, we the people might have a lot more stake in that. Yeah. Right. Currently, we don't. Yeah. Like

we're going to need a new administration and get sending representatives to Congress and doing other things that help change the way that the rules are written and how we play the game. Yeah, cuz like But how the game is currently played, we don't get that choice. Yeah. It'd be great if we did. Like 100% would be great if we did. Yeah. I want that future. I want that timeline.
Right, I would love better enforcement of antitrust legislation cuz like people were saying when we started talking about Disney and we pointed out all the things that Disney owns. Yeah, that's a kind of scary amount of stuff and people were using the word zaibatsu and I think Disney qualifies. I think the zaibatsu of note right now are like Disney, Sony, Samsung, right?
Actually, they are not technically zaibatsu by the meaning of the word, but in spirit and feel, Correct. I think they are.
Yeah. Um and so, yeah, I I I think that that's where we're at. So, let us let us know in the comments. Are Was Were you convinced? Uh what do you what do you think? Do you think that there's an edge

case, a reason that we missed that Disney like desperately wants to buy Epic? Do you um think that there's something else? Do you think Disney would scrap them for parts? Let us let us know in the comments below. We'll be back next week with a very cool special episode that you're going to not want to miss. Uh we'll tell you more about that uh when we post the stream next week. Um so, please be looking forward to that. We'll also be posting For those unfamiliar, real quick, we post our topics a couple days early on YouTube on a basically the we'll start streaming at to allow you to know and get notified, etc. and see the topic coming up. Yeah. So, if you're ever curious on what we're doing, we usually post it sometime Tuesday-ish, Yeah. usually Tuesday afternoon. Yeah. Um and so, please look forward to that as well as to breakfast on Monday where we'll be back. Uh me and Matt have a lot to talk about including Oh god, what are we talking about?
Something happened that we have to talk about. I don't even remember. God, this week has been a year long. Anyway, I think all that's left
Biggest case of insider trading um in

history Oh, yeah. Yep, uh-huh. Yeah, that was one of them. There's there's just a bunch of stuff. The gaming gaming news is in such an interesting place. Anyway, you all take care of yourselves, take care of each other and all that's left is to say bye to the people, Jeff. Bye to the people, Jeff. Have a great week, everyone. Bye.
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