Last Wednesday, The Walt Disney Company (NYSE:DIS) did its best to try to ease Wall Street's concerns. Although Disney did top earnings estimates as it narrowed its streaming losses and lifted its guidance, it is still operating in an embattled sector. But, this progress wasn’t enough to ease concerns so Disney also had to make quite a few big promises and shares rose about 7% in extended trading upon the report.

Last week, Disney revealed it will work together with Epic Games on creating an all-new games and entertainment universe. Along with this multi-year project, Disney will also acquire an equity stake in Epic Games for $1.5 billion. With joined forces, Disney and Epic Games will offer gamers and fans to create their own stories and experiences. Disney CEO Bob Iger promised both Disney and Fortnite communities that they will get to experience the worlds they love in groundbreaking new ways. Earlier in December, Disney’s biggest streaming rival Netflix Inc (NASDAQ:NFLX) also exited 2023 by ramping up its video gaming presence. In December, Netflix launched a trilogy of Grand Theft Auto in its gaming library. Considering this is one of the best-selling video game franchises, no wonder Netflix reported its newest gaming offering was in the top of gaming downloads for several weeks.  

For the quarter ended on December 30th, Disney reported revenue was flat as it amounted to $23.55 billion, topping LSEG’s estimate of $23.64 billion. But, net income attributable to the company rose from 2022 comparable quarter’s 1.28 billion to $1.91 billion. The DTC segment revenue improved 15% to $5.55 billion but still recorded an operating loss of $138 million. However, Disney narrowed the loss from all its streaming businesses from $1.05 billion it lost during 2022’s comparable quarter to $216 million.

For Netflix, the foray into ads and the password-sharing crackdown brought magic back to its streaming business. For its fourth quarter, Netflix revealed a major boost in sign-ups, as it gained more than 13 million subscribers during the quarter, blowing past Wall Street’s expectation of 8.7 million and now having a record number of 260.3 million subscribers. Due to price increases, Disney+ did report a rise in average revenue per user but it also lost 1.3 million core subscribers.  Besides a record number of subscribers, Netflix ended 2023 with a 12% YoY revenue growth with fourth-quarter net income amounting to $937.8 million. But even Netflix is focused on improving its profitability this year, but at least, it got on the other side. As for Disney, it is still seeking its comeback as it still needs to get to streaming profitability.