The Walt Disney Company and Cary-based Epic Games have solidified their longstanding collaboration through Disney’s recent equity stake purchase.
Disney’s plan involves creating a games and entertainment “universe,” so fans of its content can create their own stories and experiences through Epic Games’ Unreal Engine.
Epic Games gained traction in the market after Fortnite, one of its IPs, found global popularity. Not only is Fortnite one of the most well-known games in the world, it also has one of the most active and rapidly growing esports betting markets worldwide.
Several sportsbooks have opened doors for Fortnite wagers. However, in Epic Games’ home state, NC online sportsbooks must wait for the esports betting market to receive the regulatory green light before offering Fortnite betting.
Disney’s equity stake to buoy Epic Games after difficult six-month period
Disney bought a $1.5 billion equity stake in Epic Games and intends to create new Intellectual Property (IP) to drive earnings and boost profits. Meanwhile, the Cary-based Epic Games will receive much-needed financial aid less than six months after the company was forced to lay off employees to cut costs.
Meanwhile, Disney’s expectations from this multi-year project are quite high. According to reports, investors are unsettled after seeing a disappointing performance from the company in the fourth quarter of 2023.
Disney’s primary objective is to reassure investors by creating a promising product with Epic Gaming that revolves around streaming and wagering.
“In addition to being a world-class games experience and interoperating with Fortnite,” Disney’s press release explains, “the new persistent universe will offer a multitude of opportunities for consumers to play, watch, shop and engage with content, characters and stories from Disney, Pixar, Marvel, Star Wars, Avatar and more.”
The board believes this product can be a key form of growth for Disney’s revenue.
Why are the investors at Disney concerned?
In the final quarter of 2023, Disney reported a seven percent year-on-year increase in revenue, which also marked a five percent quarter-on-quarter increase. However, the diluted earnings per share (EPS) for the entire year dropped from $1.75 to $1.29. This is just one of the many of Disney’s recent concerns. Rising costs consistently thin the company’s margins and will continue until Disney does something to increase cash flow.
Disney’s traditional TV business suffered a substantial setback due to the actors’ strike, while profits from the streaming segment are also dropping. In addition, Disney is yet to recover from the impact of the pandemic, as its net income levels are nowhere close to the heights they were before the pandemic. Several other concerns have locked Disney in a proxy battle with the investors and forced the company to take some steps to increase profitability in FY2024.
Epic Games had concerns Of its own
In September 2023, less than a year after Disney laid off 7,000 employees to reduce costs by approximately $5.5 billion, Epic Games announced the laying off of 830 employees. Most of the employees who got fired were not a part of the core development team. Only one-third of the total layoffs came from the core team. Simultaneously, Epic Games decided to divest Bandcamp and spun off most of SuperAwesome.
The cash flow of Epic Games was consistently higher than the influx, with CEO Tim Sweeney confident that a transition to profitability was imminent. These expectations were primarily based on the evolution of Fortnite with a metaverse-inspired ecosystem. However, Sweeney eventually realized that the target was unattainable without cutting costs. Hence, 16 percent of Epic Games’ total workforce was laid off.
Why is the Fortnite esports betting market growing?
Despite the layoffs, Epic Gaming will be pleased to see Fortnite grow. Along with the Cary-based gaming company, the game has benefited other entities that have enabled esports wagering on it. Several renowned bookmakers, like BetUS, Betway, and more, offer outright and prop bets on Fortnite. However, all legal wagers must comply with Epic Games’ Terms of Service.
Many aspects have contributed to the growth of the esports betting market. Many other games like Fortnite have attracted the attention of curious bettors intrigued by the new betting segment.
The jurisdictions that have legalized esports betting already feature a live online sports betting market. Hence, many sportsbook operators have added an esports option to their platforms to increase betting activity and make the segment easily accessible.
As those operators have seen with Fortnire, Fortnite betting carries on continuously, and the Fortnite World Cup has exploded on the esports betting scene. With so many people playing the game, watching game streams and lining up for tickets to live Fortnite events, Epic’s flagship product has solidified its place in the esports betting landscape.
Can you bet on Fortnite in North Carolina?
House Bill 347, which legalizes online sports betting in North Carolina, makes room for esports betting. The online sports betting market, regulated by the North Carolina State Lottery Commission, will go live on March 11. However, esports betting will not be available at the time of launch.
While regulators have added esports betting to the state’s catalog of wagerable sports, Sterl Carpenter, deputy director of sports betting for the NCLC, explained that “Currently at this time we are waiting for operators to present their petition for which leagues they wish to offer in this type of event.”
Bet365, one of the sportsbooks launching on March 11, offers esports betting markets in other states and countries where it is legal. We could expect the British operator to petition specific esports betting markets in North Carolina as well.
Fortnite betting has grown in popularity worldwide, and it will very likely be among the first games to receive betting approval in North Carolina. We also expect staples like Call of Duty, Dota 2, League of Legends, Counter Strike and Overwatch to get approved once regulators okay NC esports betting.
Image Credit: Associated Press