Bank of America’s Jessica Lief Ehrlich talked about Disney’s $130 price target on “Craman Countdown,” a day after the earnings boosted the stock by 10%.
Disney is looking to tap into a younger generation’s love for video games with a newly announced deal with Epic Games.
Bob Iger, CEO of the entertainment giant, said during an earnings call Wednesday night that Millennials, Gen Z and Gen Alpha are more likely to spend a “significant amount” of their screen time playing video games. He said he noticed something.
This trend led Disney to conclude that it “needed to respond as quickly as possible in a very convincing way,” ultimately striking a deal with the video game developer behind the wildly popular Fortnite. , he said.
Attendees are seen in the Disney+ logo at the Walt Disney D23 Expo on September 9, 2022 in Anaheim, California. (Patrick T. Fallon/AFP via Getty Images/Getty Images)
As part of the collaboration, they will build an “Entertainment Universe” that will interoperate with Fortnite. The companies said the content, characters and stories from Disney and Pixar, Marvel, Star Wars, Avatar and other Disney brands “offer numerous opportunities for consumers to play, watch, shop and engage.” .
Details of Disney+ password sharing crackdown are the same as NETFLIX
Overall, this “universe” presents Disney with “an incredible opportunity to not only meet more consumers in the moment, but also allow more audiences to develop a bond with Disney’s iconic brands and franchises.” Iger told analysts and investors.
The entertainment giant is also buying $1.5 billion worth of Epic Games stock.
This illustrated image shows a person logging into Epic Games’ Fortnite on a smartphone in Los Angeles on August 14, 2020. The FTC announced Tuesday that players can claim their share of the $245 million FTC lawsuit. (Chris Delmas/AFP via Getty Images/Getty Images)
“In the same way that we take IP from movies and TV and express it in the parks, this is a great way to bring it to life in games,” the Disney CEO said. “And for us, this is a way to get in the game with them with a $1.5 billion investment, and because we’re in the game, not only strengthen our partnership, but actually build a world where we don’t take too much risk. It’s also a method’ company. “
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| DIS | walt disney company | 110.53 | +11.26 | +11.35% |
Epic Games’ new deal drew commentary from analysts, with TD Cowen’s Doug Kreutz calling the deal “interesting” in a research note.
Disney beats revenue forecasts, stock price soars in extended trading
“Given that Epic’s trailer states that this experience will be released ‘soon’, it seems like it could be released as early as late 2024, and possibly by 2025.” This approach is rather in line with Disney’s strategy of licensing its IP to top game developers. “Rather than trying to do it in-house (or spending a lot of money on gaming M&A),” he said.
The companies described the project only as “multi-year.”
Iger said Disney has pursued video games in “a lot of different directions,” and its licensing strategy has brought it the most success. That shift in strategy happened about eight years ago.
Disney CEO Bob Iger receives huge payout
Disney announced Wednesday that it has previously partnered with Epic Games to use its technology to develop video games, animation and theme park attractions. Some of those characters and IP have appeared in Fortnite in various forms in the past.
India – 12/13/2023: In this illustrated photo, the Epic Games logo is displayed on a mobile phone screen. (Photo illustration: Idrees Abbas/SOPA Images/LightRocket, Getty Images) (Idrees Abbas/SOPA Images/LightRocket, Getty Images/Getty Images)
The “Fortnite” video game first became available in 2017. Since then, it has grown to over 350 million accounts and over 100 million active players.
