Disney Revives Video Game Strategy with Epic Games Partnership
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4 days ago
0mins
Should l Buy DIS?
Source: Fool
- Investment in Epic Games: Disney announced a $1.5 billion investment in Epic Games in 2024 to strengthen its position in the gaming sector, indicating the company's commitment to the gaming market and potential new revenue streams.
- Entertainment Division Integration: Disney is integrating its gaming division into its core entertainment division, aiming to revitalize key IPs like Star Wars and Marvel by incorporating them into popular games like Fortnite, thereby enhancing overall business growth potential.
- Market Challenges: While Disney's theatrical business is expected to rebound strongly in 2026, the company faces multiple challenges due to underperformance post-pandemic and pressures from the rise of streaming, particularly in its media networks segment.
- Low-Risk Strategy: By partnering with Epic Games, Disney is pursuing a relatively low-risk strategy that allows other developers to take on more responsibility while leveraging gaming as a new platform for audience engagement, thereby enhancing brand influence.
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Analyst Views on DIS
Wall Street analysts forecast DIS stock price to rise
19 Analyst Rating
16 Buy
3 Hold
0 Sell
Strong Buy
Current: 103.900
Low
123.00
Averages
137.29
High
152.00
Current: 103.900
Low
123.00
Averages
137.29
High
152.00
About DIS
The Walt Disney Company is a diversified worldwide entertainment company. The Company's segments include Entertainment, Sports and Experiences. The Entertainment segment generally encompasses its non-sports focused global film and episodic content production and distribution activities. The lines of business within the Entertainment segment along with their business activities include Linear Networks, Direct-to-Consumer, and Content Sales/Licensing. The Sports segment encompasses its sports-focused global television and direct-to-consumer (DTC) video streaming content production and distribution activities. The lines of business within the Sports segment include ESPN and Star. The Experiences segment includes Parks and Experiences and Consumer Products. Parks and Experiences consists of Walt Disney World Resort in Florida, Disneyland Resort in California, Disney Cruise Line, and others. Consumer Products includes licensing of its trade names, characters, visual, literary and other IP.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Disney's Glorious History and Future Outlook
- Animation Revolution: On November 18, 1928, Disney's 'Steamboat Willie' premiered in New York, becoming the first commercially successful animated short to integrate synchronized sound, marking a significant breakthrough that established Disney's leadership in the global entertainment industry.
- Global Theme Park Leader: Disney currently operates 12 theme parks worldwide, attracting approximately 140 to 145 million visitors annually, with Magic Kingdom consistently ranking as the world's most-visited theme park, showcasing its strong appeal in the leisure and entertainment market.
- Strong Financial Performance: For fiscal year 2025, Disney reported record revenue of $94.43 billion, a 3.35% increase year-over-year, with net income reaching $12.4 billion, reflecting the company's success in strategic investments and operational efficiency.
- Future Challenges and Opportunities: Despite facing intensified competition in streaming and high content costs, analysts remain optimistic about Disney's stock, citing strong performance in its Experiences segment and improving streaming profitability as key drivers for future growth.
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- Core Business Stability: Alphabet's search segment achieved double-digit growth in 2025, with similar expectations for 2026, despite a slight decline in network revenue; this stable structure supports future investments and growth initiatives.
- Hidden Value of YouTube: YouTube generated over $40 billion in ad revenue last year, with total revenue exceeding $60 billion when including subscriptions, establishing itself as the largest streaming service globally and highlighting its critical role in the modern media landscape.
- Rapid Growth of Google Cloud: Google Cloud experienced a 48% revenue increase in the latest quarter, reaching $17.7 billion, with an operating margin nearing 30%, showcasing its potential as a growth engine for Alphabet, particularly amid rising demand for AI infrastructure.
- Investment Opportunities in Other Bets: Alphabet's ventures like Verily Health and Waymo are rapidly evolving, with Verily focusing on AI-driven precision health and Waymo expanding in autonomous driving, indicating significant market potential that could yield long-term benefits for the company.
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Analysis of Alphabet's Future Growth Potential
- Core Business Stability: Alphabet's search business is projected to achieve double-digit growth in 2025, while subscription platforms and devices have grown over 20%, indicating the company's ability to maintain stability in a rapidly changing market, ensuring future investment and growth potential.
- Advertising Revenue Growth: Alphabet's annual revenue has surpassed $400 billion for the first time, with search revenue hitting $63 billion in Q4, demonstrating the strength of its advertising engine and the enhancement of user engagement through AI-driven features, further solidifying its market leadership.
- Cloud Business Surge: Google Cloud experienced a 48% growth in the most recent quarter, reaching $17.7 billion in revenue with an operating margin nearing 30.1%, showcasing its strong growth potential amid surging demand for AI infrastructure, which could become a major revenue source for Alphabet in the future.
- Hidden Value of YouTube: YouTube's ad revenue exceeds $40 billion, with total revenue from subscriptions potentially reaching $60 billion, making it the largest streaming service globally, highlighting its significance and high-margin growth potential in the modern media landscape.
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Streaming Industry Weekly Recap Highlights Key Developments
- Netflix Q1 Earnings Miss: Netflix reported Q1 EPS of $1.23 on revenue of $12.25B, exceeding estimates but guiding Q2 EPS to only $0.78, below expectations, leading to a stock decline that reflects market concerns about future growth prospects.
- Roku Surpasses 100M Users: Roku announced it has surpassed 100 million streaming households globally, with CEO Anthony Wood stating this milestone will shape the future of television, highlighting the company's strong momentum and advertiser confidence in the streaming market.
- Creators Oppose Warner Deal: Over 1,000 writers, actors, and directors released a letter opposing Paramount's acquisition of Warner Bros. Discovery, arguing it would further consolidate the media landscape, reduce opportunities for creators, and impact industry diversity, showcasing strong industry resistance to mergers.
- Magnite Partners with AMC: Magnite announced a collaboration with AMC Global Media to provide a unified linear and streaming advertising solution via ClearLine, enabling advertisers to reach audiences more effectively, indicating ongoing innovation and market expansion in advertising technology.
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Disney Launches Infinity Vision Movie Format to Compete with IMAX
- New Movie Format Launch: Disney is set to unveil its Infinity Vision movie format on December 18, aiming to compete with IMAX and marking a significant innovation in cinema experiences.
- Technical Standards Requirement: To qualify for the “Infinity Vision” designation, theaters must have screens at least 50 feet wide, laser projection, and a Dolby 7.1 surround sound system, ensuring a high-quality viewing experience for audiences.
- Significant Market Potential: Approximately 5,500 movie screens globally meet the Infinity Vision criteria, which is more than three times the number of IMAX screens, providing Disney with a substantial market opportunity.
- Competitive Strategy Response: With IMAX occupied by the screening of Warner Bros.' Dune: Part Three during the opening weekend of Avengers: Doomsday, Disney's introduction of Infinity Vision aims to meet audience demand and enhance its competitive position in the market.
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Disney Plans for Super Bowl LXI Broadcast in 2027
- Disney Super Bowl Plans: Disney (DIS) rose 0.08% in premarket trading after announcing plans for Super Bowl LXI in 2027, leveraging its rights deal with the NFL to broadcast the game on ABC and ESPN, while also featuring an 'alterna-cast' hosted by Peyton and Eli Manning on ESPN2, which is expected to enhance brand visibility and attract a larger audience.
- Exxon Mobil LNG Offer Withdrawal: Exxon Mobil (XOM) fell 1.21% before the opening bell after withdrawing its offer to sell two initial cargoes of liquefied natural gas from its Golden Pass export plant in Texas, which has been operating at roughly one-third of its capacity since production began last month, taking in approximately 287 million cubic feet of natural gas per day, significantly below its nameplate capacity of 800 million cubic feet, indicating operational efficiency issues.
- Fifth Third Bancorp Loan Loss Provisions Rise: Fifth Third Bancorp (FITB) slipped 0.10% in premarket trading as higher-than-expected loan loss provisions weighed on its first-quarter results, reporting a GAAP EPS of $0.15, missing the consensus estimate of $0.22, while revenue of $2.83 billion fell short by $9 million, reflecting rising credit risk concerns.
- Apple's Strong Performance in China: Apple (AAPL) gained in premarket trade following data showing a 20% increase in iPhone shipments in China during the first quarter, driven by strong performance of the iPhone 17 series, promotional price cuts, and government subsidies, allowing Apple to capture a 19% market share in China's smartphone market, just behind Huawei's 20%, indicating enhanced competitive strength.
See More
Disney's Glorious History and Future Outlook
- Animation Revolution: On November 18, 1928, Disney's 'Steamboat Willie' premiered in New York, becoming the first commercially successful animated short to integrate synchronized sound, marking a significant breakthrough that established Disney's leadership in the global entertainment industry.
- Global Theme Park Leader: Disney currently operates 12 theme parks worldwide, attracting approximately 140 to 145 million visitors annually, with Magic Kingdom consistently ranking as the world's most-visited theme park, showcasing its strong appeal in the leisure and entertainment market.
- Strong Financial Performance: For fiscal year 2025, Disney reported record revenue of $94.43 billion, a 3.35% increase year-over-year, with net income reaching $12.4 billion, reflecting the company's success in strategic investments and operational efficiency.
- Future Challenges and Opportunities: Despite facing intensified competition in streaming and high content costs, analysts remain optimistic about Disney's stock, citing strong performance in its Experiences segment and improving streaming profitability as key drivers for future growth.
See More
Analysis of Alphabet's Future Growth Potential
- Core Business Stability: Alphabet's search segment achieved double-digit growth in 2025, with similar expectations for 2026, despite a slight decline in network revenue; this stable structure supports future investments and growth initiatives.
- Hidden Value of YouTube: YouTube generated over $40 billion in ad revenue last year, with total revenue exceeding $60 billion when including subscriptions, establishing itself as the largest streaming service globally and highlighting its critical role in the modern media landscape.
- Rapid Growth of Google Cloud: Google Cloud experienced a 48% revenue increase in the latest quarter, reaching $17.7 billion, with an operating margin nearing 30%, showcasing its potential as a growth engine for Alphabet, particularly amid rising demand for AI infrastructure.
- Investment Opportunities in Other Bets: Alphabet's ventures like Verily Health and Waymo are rapidly evolving, with Verily focusing on AI-driven precision health and Waymo expanding in autonomous driving, indicating significant market potential that could yield long-term benefits for the company.
See More
Analysis of Alphabet's Future Growth Potential
- Core Business Stability: Alphabet's search business is projected to achieve double-digit growth in 2025, while subscription platforms and devices have grown over 20%, indicating the company's ability to maintain stability in a rapidly changing market, ensuring future investment and growth potential.
- Advertising Revenue Growth: Alphabet's annual revenue has surpassed $400 billion for the first time, with search revenue hitting $63 billion in Q4, demonstrating the strength of its advertising engine and the enhancement of user engagement through AI-driven features, further solidifying its market leadership.
- Cloud Business Surge: Google Cloud experienced a 48% growth in the most recent quarter, reaching $17.7 billion in revenue with an operating margin nearing 30.1%, showcasing its strong growth potential amid surging demand for AI infrastructure, which could become a major revenue source for Alphabet in the future.
- Hidden Value of YouTube: YouTube's ad revenue exceeds $40 billion, with total revenue from subscriptions potentially reaching $60 billion, making it the largest streaming service globally, highlighting its significance and high-margin growth potential in the modern media landscape.
See More
Streaming Industry Weekly Recap Highlights Key Developments
- Netflix Q1 Earnings Miss: Netflix reported Q1 EPS of $1.23 on revenue of $12.25B, exceeding estimates but guiding Q2 EPS to only $0.78, below expectations, leading to a stock decline that reflects market concerns about future growth prospects.
- Roku Surpasses 100M Users: Roku announced it has surpassed 100 million streaming households globally, with CEO Anthony Wood stating this milestone will shape the future of television, highlighting the company's strong momentum and advertiser confidence in the streaming market.
- Creators Oppose Warner Deal: Over 1,000 writers, actors, and directors released a letter opposing Paramount's acquisition of Warner Bros. Discovery, arguing it would further consolidate the media landscape, reduce opportunities for creators, and impact industry diversity, showcasing strong industry resistance to mergers.
- Magnite Partners with AMC: Magnite announced a collaboration with AMC Global Media to provide a unified linear and streaming advertising solution via ClearLine, enabling advertisers to reach audiences more effectively, indicating ongoing innovation and market expansion in advertising technology.
See More
Disney Launches Infinity Vision Movie Format to Compete with IMAX
- New Movie Format Launch: Disney is set to unveil its Infinity Vision movie format on December 18, aiming to compete with IMAX and marking a significant innovation in cinema experiences.
- Technical Standards Requirement: To qualify for the “Infinity Vision” designation, theaters must have screens at least 50 feet wide, laser projection, and a Dolby 7.1 surround sound system, ensuring a high-quality viewing experience for audiences.
- Significant Market Potential: Approximately 5,500 movie screens globally meet the Infinity Vision criteria, which is more than three times the number of IMAX screens, providing Disney with a substantial market opportunity.
- Competitive Strategy Response: With IMAX occupied by the screening of Warner Bros.' Dune: Part Three during the opening weekend of Avengers: Doomsday, Disney's introduction of Infinity Vision aims to meet audience demand and enhance its competitive position in the market.
See More
Disney Plans for Super Bowl LXI Broadcast in 2027
- Disney Super Bowl Plans: Disney (DIS) rose 0.08% in premarket trading after announcing plans for Super Bowl LXI in 2027, leveraging its rights deal with the NFL to broadcast the game on ABC and ESPN, while also featuring an 'alterna-cast' hosted by Peyton and Eli Manning on ESPN2, which is expected to enhance brand visibility and attract a larger audience.
- Exxon Mobil LNG Offer Withdrawal: Exxon Mobil (XOM) fell 1.21% before the opening bell after withdrawing its offer to sell two initial cargoes of liquefied natural gas from its Golden Pass export plant in Texas, which has been operating at roughly one-third of its capacity since production began last month, taking in approximately 287 million cubic feet of natural gas per day, significantly below its nameplate capacity of 800 million cubic feet, indicating operational efficiency issues.
- Fifth Third Bancorp Loan Loss Provisions Rise: Fifth Third Bancorp (FITB) slipped 0.10% in premarket trading as higher-than-expected loan loss provisions weighed on its first-quarter results, reporting a GAAP EPS of $0.15, missing the consensus estimate of $0.22, while revenue of $2.83 billion fell short by $9 million, reflecting rising credit risk concerns.
- Apple's Strong Performance in China: Apple (AAPL) gained in premarket trade following data showing a 20% increase in iPhone shipments in China during the first quarter, driven by strong performance of the iPhone 17 series, promotional price cuts, and government subsidies, allowing Apple to capture a 19% market share in China's smartphone market, just behind Huawei's 20%, indicating enhanced competitive strength.
See More
