Disney is teaming up with video game giant Epic Games, taking out a $1.5 billion minority stake in the company behind the smash hit "Fortnite," CEO Bob Iger announced Wednesday.
In an interview with CNBC, Iger said the company's bet is "our biggest foray into the games space ever."
Disney will team up with Epic Games to develop a "Disney universe for gaming and for play and for watching," Iger told CNBC.
Epic's third-person-shooter game "Fortnite" has raked in the cash on the back of microtransactions and crossovers with other IPs like Dragon Ball, Stranger Things, and Family Guy.
Disney revealed after markets closed on Wednesday that it beat earnings expectations after cutting streaming costs and "turned the corner and entered a new era for our company," Iger wrote in an earnings report.
Disney joins other media companies, particularly Warner Bros. Discovery and Netflix, that have been leaning into games to diversify their revenue and leverage their big-name franchises.
But Disney and other legacy media have a checkered history of success with games. And analysts have cast doubt on the ability of gaming to make up for legacy media's linear TV business, given the time it takes to release new high-production value games.
