The Upside of Iger’s Panicky Deal
Roughly 18 months ago, Bob Iger faced a difficult challenge.
Recently returned as the CEO of The Walt Disney Company, Iger faced an activist investor battle with billionaire Nelson Peltz.
HEIDI GUTMAN/CNBC/NBCU PHOTO BANK/NBCUNIVERSAL/GETTY IMAGES; SLAVEN VLASIC/GETTY IMAGES
While the outcome would eventually go in Iger’s favor in decisive fashion, Iger appeared to be on the ropes in early 2024.
That’s why nobody should have been surprised when the CEO swung for the fences with several shocking announcements.
Nelson Peltz
A couple of them have already proven brilliant, and another should pay huge dividends next year.
Let’s discuss the upside of Bob Iger’s panicky deal. Surprisingly, there’s a lot of it.
Panic Fire Defined
Photo: AdWeek
How bad a shape was Disney in when Bob Iger returned? Well, think of Bob Chapek as the world’s worst tenant.
Once he left, the owner of the house discovered that he’d drawn on the walls, smoked incessantly, and wrecked the plumbing.
Photo: Variety
Iger got stuck with the task of cleaning up after his terrible guest, which was karmic in a way.
Remember that Iger chose Chapek to succeed him, a decision that still makes absolutely no sense to this day.
Photo: Patrick T. Fallon/Bloomberg
So, Iger grabbed a mop, a broom, and a fistful of cleaning wipes and went to work.
Right around this time, Peltz showed up as an obnoxious, unwelcome house guest.
Photographer: Patrick T. Fallon/Bloomberg via Getty Images
You know the type. He’s your relative/friend who has zero experience in your profession yet constantly tells you how to do your job.
Eventually, Iger pulled a “Ich fühle mich genug besucht” with Peltz. It’s a German phrase that means “I am feeling visited enough.”
Romain Maurice/Getty Images for Carbone Beach | Dia Dipasupil/Getty Images
Basically, it’s “You don’t have to go home, but you can’t stay here.” And Peltz left, badly defeated in his attempt to push his way onto Disney’s Board.
Along the way, Iger pulled off his desperate moves, though. We’re talking about ones that a stable GM would never consider.
Photo: restorethemagic.com
And Iger struck pure gold with one…diamond, even, when Moana 2 switched from a Disney+ streaming series.
As a movie, the film earned just under $1.06 billion in box office despite never being intended as a theatrical release.
Photo: Disney
Iger had spun straw into gold, but that wasn’t the most interesting decision he made at the top.
If You Don’t Know Fortnite, Ask Your Kid
(Photo by JC Olivera/Getty Images)
Bob Iger knows less about video games than the oldest person at your local retirement home.
I guess Iger was so hyper-focused on running Disney’s television division and then the entirety of the company that he missed out on Nintendo.
(Photo by Jerod Harris/Getty Images for Vox Media)
For many years, outsiders have expressed confusion over Disney’s approach to the video game industry.
The company held the most prized assets of any company, a statement that was true before Disney bought Pixar, Marvel, and Star Wars.
Photo: Marvel
Despite this fact, Disney’s internal attempts at gaming failed dramatically.
Even those that temporarily succeeded, like Disney Infinity, were mismanaged. It was a recurring theme.
Fortunately, Disney hired some people who had grown up after the 1950s, and they convinced Iger to pay more attention.
In February 2024, Disney suddenly announced a new agreement with Epic Games, the creators of Fortnite.
Photo: Disney
At the time, I joked that Iger had unlocked the Victory Royale achievement, which is a Fortnite thing.
In actuality, what Iger had done was set up Disney for future success…whether he understood it or not.
Photo: EPIC Games
Disney Experiences Chairman Josh D’Amaro showed Iger, his boss, the demographic statistics about Gen Z. It’s a gamer group.
Now, Disney owns a piece of Epic Games, and this business relationship is having an impact on Fortnite. Here’s Darth Vader.
Photo: Epic Games
That’s just one of many Star Wars experiences coming to the wildly popular video game.
Disney has scaled up its formerly neglected video game division in anticipation of more gaming tie-ins like these.
(Photo by Tristan Fewings/Getty Images for Hamleys)
As we speak, sports fans can visit ESPN Football Island and Basketball Island in Fortnite, a game that is ostensibly a first-person shooter.
None of these ideas could have possibly come from Iger, which makes the whole thing that much funnier.
An Unreal Advantage
Photo: EPIC Games
Despite the lucrative nature of the Fortnite deal, Disney’s financial benefits of the Epic Games stake have just begun.
Disney has worked with Epic Games for a while now due to the latter company’s technical innovation.
Photo Credit: Getty Images
In 1998, Epic unveiled Unreal Engine, one of the most important 3D computer graphics generators ever.
This game engine has improved over several iterations, with Disney using Unreal Engine 4 heavily.
Jon Favreau
Director Jon Favreau employed Unreal to create the backgrounds for his Disney+ series, The Mandalorian.
Similarly, Disney used this functionality to create Millennium Falcon: Smugglers Run. That was the era of Unreal Engine 4.
Now, we’ve entered the Unreal Engine 5 era, and it’s a dramatic upgrade in image quality. Here’s an example:
Next year, Disney will unveil the second mission for Smugglers Run, and it’ll make vacationers forget the first one ever existed.
Image: Disney
Right now, everyone is hyping the Test Track reboot, which I’m confident will be great.
However, in terms of iterative improvement, Smugglers Run should smash the competition.
(Photo by Tobias SCHWARZ / AFP)
As a byproduct of the Epic Games stake, Disney now liaises directly with the Unreal Engine team.
Unreal Engine 5 will power this new mission, with Disney even upgrading the underlying tech.
An Unreal Difference
Photo: mentalfloss.com
I won’t bore you with details of the graphics processing unit (GPU) arms race, but I’ll point something out.
Nvidia, the most successful GPU processor, is now just behind Microsoft in terms of market cap. It’s the second-biggest company in the world.
That should mean something to you when I tell you that Disney is throwing state-of-the-art GPUs into Smugglers Run.
I bought a 3090 GPU system three years ago. The new 5090s absolutely eviscerate it. So, you can imagine how big the gap has been since 2019.
Photo: Matt Stroshane, photographer
That’s the year when Smugglers Run first debuted, and it’s understandable why Disney is providing a hardware refresh.
With the extra firepower, ILM Immersive can add oh so much to the rider experience.
Disney
Specifically, guests can choose a path now. Yes, Smugglers Run will vary its mission similar to Star Tours – The Adventures Continue!.
However, Disney has indicated that the people in the cockpit will determine the outcome now rather than it being a random dice roll.
Since your new mission involves a bounty, you’ll be joined by the most famous bounty hunter in the Star Wars galaxy, The Mandalorian.
He and his freakishly powerful son, Baby Yoda, will help you blow up lots of stuff on the way to the finale.
Photo Credit: www.geek.com
Programmers involved with the project are absolutely gleeful about dynamically generating the destruction your ship causes along the way.
In less than 11 months, Smugglers Run will reopen as a dramatically better attraction.
Credit: Disney
A year from now, people may view it on the same level as Star Wars: Rise of the Resistance.
And none of that would be possible if not for Iger’s weird, panicky deal with Epic Games.
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