CARY, North Carolina — October 14, 2026 — Epic Games, the company behind Fortnite and Unreal Engine, is taking one of the video game industry’s most controversial steps toward artificial intelligence, delaying an upcoming Disney collaboration while instructing developers to rely far more heavily on AI to create the game’s code and artwork.
The unannounced shooter, reportedly featuring characters from Disney’s Marvel and Star Wars franchises, had been internally targeted for release in March 2027.
But according to an October 12 Bloomberg investigation by Jason Schreier, the project has fallen behind schedule, and employees have not been given a replacement launch date.
The company is now embracing an AI-first development strategy, with internal instructions calling for generative AI to take over substantial portions of programming and art production while human developers direct and review the results.
The reported move represents an unusually aggressive attempt by a major video game company to reorganize production around AI tools.
It also comes at a difficult time for Epic.
In March 2026, the company announced more than 1,000 layoffs after acknowledging that declining Fortnite engagement had contributed to spending substantially more than it earned.
Disney, meanwhile, has invested $1.5 billion in Epic as part of an ambitious multiyear partnership to create an interconnected entertainment universe featuring its biggest franchises.
The latest delay has therefore become a test not only of AI’s ability to accelerate game development but also of the financial and creative strategy behind one of the industry’s most closely watched partnerships.
Epic Games is betting that AI can help complete a delayed Marvel–Star Wars project faster and more efficiently. But the bigger question is whether the technology will deliver a better game — or create an even larger backlash among developers and fans who believe creativity should remain in human hands.
Epic Games Delays Its Upcoming Disney Shooter
The reported delay affects an unannounced game being developed through Epic’s partnership with Disney.
According to Bloomberg, the project is a shooter involving characters from Marvel and Star Wars.
The game had been targeted internally for March 2027.
However, the development team has now been told that the release is postponed, without a revised timetable.
The title has not received a publicly confirmed final name or launch date.
That distinction is important because the March schedule came from people familiar with the project’s internal planning.
It was not necessarily a consumer-facing release date that Disney and Epic had formally announced.
Sources told Bloomberg that development had progressed more slowly than expected.
Epic reportedly underestimated the number of developers and amount of time required to complete the project.
The new AI-first strategy is being introduced as part of the response.
However, the available reporting does not prove that switching to AI will shorten the remaining development process.
Whether the decision improves productivity will depend on execution, technical reliability and the amount of rework required.
Developers Told to Stop Writing Code Manually
One of the most striking claims in Bloomberg’s investigation concerns internal instructions issued to the game’s development team.
According to an internal message reviewed by Bloomberg, one project director told employees:
“No more hand-written code.”
The reported directive calls for programming to be produced through AI-assisted workflows instead of relying primarily on developers writing code from scratch.
Tools including Anthropic’s Claude are expected to play an important role.
Human developers would still manage the process, provide instructions, review results and guide the project.
This represents a change in how software production is organized.
Rather than developers writing every function manually, AI systems may generate code based on requirements supplied by engineers.
Developers would then evaluate whether the output works as intended.
However, AI-generated code can contain defects, security weaknesses and other errors.
A successful AI-first approach therefore requires rigorous testing, technical oversight and clear accountability.
The directive should not be interpreted as proof that all human programmers have been dismissed from the project.
All Game Art Could Be Produced Through AI Workflows
The reported changes extend beyond programming.
Bloomberg said the development team was instructed to produce the game’s artwork through comprehensive AI workflows.
That could involve generative tools assisting with visual concepts, asset creation, design iterations and other production tasks.
For conventional game development, artists typically create and refine a wide range of materials, including characters, environments, textures, interfaces and promotional assets.
Generative AI may reduce the time required for certain repetitive or exploratory tasks.
But commercial game art involves more than producing an attractive image.
Assets must meet technical requirements, work correctly in the game engine, maintain visual consistency and support the intended gameplay.
For a title involving Marvel and Star Wars, visual consistency is especially important because audiences have strong expectations about established characters and fictional worlds.
The available reporting does not establish whether the final game will contain exclusively AI-generated assets or how Epic will handle all stages of artistic review.
It establishes that the team has reportedly been directed to use AI-first workflows.
Epic Confirms Its Push Toward AI-Accelerated Development
Epic has acknowledged the broader shift.
In a statement provided to Bloomberg, communications director Jake Jones said the company was embracing AI-accelerated development while keeping Epic’s developers responsible for creative direction.
That response confirms the company’s commitment to using AI more extensively.
However, it does not independently verify every detail of the internal instructions reported by Bloomberg.
Disney did not immediately provide a substantive response to Bloomberg’s request for comment.
The distinction matters because the investigation relies partly on anonymous sources familiar with internal development.
Epic’s public statement supports the existence of a significant AI initiative but is narrower than the reported internal directive.
The project has also not been publicly demonstrated in a form that allows players to judge the results.
Some Employees Were Reportedly Shocked by the Decision
The policy shift has generated unease among developers involved in the project.
According to Bloomberg, some employees reacted with surprise during an internal video meeting.
Others questioned whether AI-generated work would create additional technical problems.
Some reportedly hoped the instructions would eventually be reconsidered.
The reaction reflects a broader disagreement within game development.
Supporters of generative AI believe it can accelerate production, reduce repetitive work and allow smaller teams to create more ambitious experiences.
Critics argue that AI tools can introduce errors, undermine artistic consistency and reduce opportunities for skilled workers.
The disagreement is particularly sensitive when employees are already concerned about layoffs and financial pressure.
However, Bloomberg’s description of staff reactions does not establish that every developer at Epic opposes AI.
The industry contains a range of opinions and experiences.
Disney’s $1.5-Billion Investment Raises the Stakes
The delayed game is connected to a major partnership announced in February 2024.
At that time, Disney revealed plans to invest $1.5 billion in Epic Games in exchange for an equity stake.
The companies also announced an ambitious collaboration to build an entertainment universe connected to Fortnite.
The planned ecosystem would draw on Disney’s major intellectual-property franchises.
These include Disney, Pixar, Marvel, Star Wars and Avatar.
The goal was to create experiences where users could play, socialize, watch entertainment and interact with familiar stories and characters.
The partnership was designed as a multiyear initiative.
It was not limited to a single shooter game.
For that reason, the reported delay should not be described as the collapse of Disney’s entire investment.
Nor does the $1.5-billion figure represent the development budget of the delayed game.
It was an equity investment in Epic associated with the broader partnership.
Why Disney Wants a Bigger Presence in Gaming
Disney owns some of the world’s most valuable entertainment franchises.
Its characters and fictional worlds attract audiences through movies, television series, theme parks, merchandise and video games.
But younger audiences increasingly spend substantial amounts of time in interactive digital environments.
Fortnite has demonstrated how gaming platforms can function as entertainment destinations rather than simply places to compete in matches.
Its collaborations have included virtual concerts, branded experiences and crossover content.
Disney’s partnership with Epic is intended to build on that model.
The company wants to make its characters accessible through interactive experiences that encourage longer-term engagement.
That creates potential opportunities for licensing, digital commerce and new entertainment products.
However, the financial benefits depend on delivering experiences that players find compelling.
The delay of a major game could complicate execution, even if the broader strategic relationship remains intact.
Marvel and Star Wars Make This a High-Pressure Project
A shooter involving characters from Marvel and Star Wars would carry substantial commercial expectations.
Both franchises have dedicated international audiences.
They also have established histories in video games.
Marvel has appeared in successful titles across action, adventure and multiplayer genres.
Star Wars has an extensive gaming history spanning shooters, role-playing games and large-scale action experiences.
Combining elements of both franchises could attract significant attention.
However, the reported game’s exact mechanics, character roster and business model have not been officially confirmed.
It would be premature to describe it as a completed crossover universe or a specific Fortnite expansion.
The more important issue is that Epic is attempting to deliver a high-profile franchise project while significantly changing its development process.
That combination creates opportunities and risks.
Epic Laid Off More Than 1,000 Workers in March
The AI initiative follows substantial workforce reductions.
On March 24, 2026, Epic announced that it was laying off more than 1,000 employees.
CEO Tim Sweeney said declining Fortnite engagement, beginning in 2025, had contributed to financial pressure.
In the company’s official message, he acknowledged that Epic had been spending significantly more than it earned.
The layoffs were accompanied by more than $500 million in identified cost reductions involving contracting, marketing and other expenses.
Epic attributed its challenges partly to broader problems affecting the gaming industry.
These included slower growth, weaker spending and competition for players’ attention.
The company also cited its own difficulties in consistently delivering strong Fortnite seasons.
The timing of the AI-first announcement has therefore intensified questions about labor and cost efficiency.
However, Epic has not established that the Disney game’s AI directive is a direct replacement program for the employees laid off in March.
The two developments are connected through the company’s broader financial pressures but should not be treated as identical decisions.
Tim Sweeney Says AI Is About Survival, Not Just Cost Cutting
Epic CEO Tim Sweeney has emphasized the importance of adapting to AI.
In subsequent reporting, he described the company’s objective as surviving the AI revolution.
He has argued that AI-powered tools can allow developers to build more sophisticated experiences and increase production capacity.
Epic’s public position is that the technology should accelerate human-led development.
This is different from claiming that software engineers, artists and designers are no longer needed.
Nevertheless, critics question whether the distinction will hold as AI becomes more capable.
If companies can generate more content with fewer workers, the labor-market effects could be substantial.
The industry’s challenge is determining how to use automation without losing the judgment, technical expertise and creative vision that distinguish successful games.
Game Developers Are Increasingly Skeptical About Generative AI
The wider industry is divided over the use of AI.
According to the 2026 State of the Game Industry survey conducted by the Game Developers Conference, 36% of industry professionals reported using generative AI as part of their work.
However, 52% believed the technology was having a negative impact on the industry.
That was an increase from 30% in the previous year’s survey.
Only about 7% viewed generative AI as having a positive impact.
The findings suggest that adoption does not necessarily translate into approval.
Developers may use AI tools because they are available or required while remaining concerned about their longer-term consequences.
Opinions also differ by role.
Artists, designers, writers and programmers reported particularly high levels of skepticism.
The survey is not proof that AI cannot improve productivity.
But it demonstrates that workforce acceptance cannot be assumed.
Why AI-Generated Code Could Create New Problems
Generative AI can assist programmers by producing functions, explaining errors and creating test cases.
However, complex games involve millions of interacting technical decisions.
A code change may affect gameplay, performance, networking, physics or compatibility across devices.
Even when an AI-generated function appears correct, it may fail under unusual conditions.
Errors can also become harder to identify when large volumes of generated code are introduced quickly.
This creates a risk that apparent productivity improvements during early development could be offset by testing and maintenance costs.
Experienced engineers remain important for architecture, security, performance optimization and debugging.
The success of Epic’s reported strategy will depend on whether developers can maintain adequate control over these processes.
AI-generated code is a potential productivity tool, not a substitute for confirming that software works.
AI-Generated Art Creates Copyright and Quality Questions
The use of AI in game art raises separate issues.
Visual assets must be consistent with a project’s creative direction.
They also need to meet technical standards and licensing requirements.
Generative AI systems can produce unexpected details, inconsistencies or outputs requiring substantial revision.
Copyright questions may also arise depending on the data used to train a model, the terms of the tool and the nature of generated content.
For Disney, intellectual-property control is especially important.
Its characters, logos and fictional worlds are commercially valuable assets.
The company has strong incentives to maintain consistency and appropriate use of those properties.
However, the reporting does not establish that Epic has infringed any copyright through the delayed project.
The issue is a potential legal and production risk that a commercially released game would need to address.
Could AI Make Game Development Faster or Slower?
The central business argument for AI-assisted production is efficiency.
Developers may use AI to generate prototypes, test ideas and automate repetitive tasks.
Those benefits could be particularly valuable for large studios managing substantial production costs.
But results can vary.
Teams may need time to learn new tools and establish quality-control processes.
AI-generated material may also require significant correction.
Changes to production methods can disrupt existing pipelines if introduced during a project’s development.
Therefore, shifting to an AI-first system does not guarantee faster delivery.
Epic’s delayed Disney shooter offers an important test.
If the company can produce a high-quality title more efficiently, other studios may become more interested in similar workflows.
If the project encounters further delays or quality problems, skepticism may intensify.
Unreal Engine Could Become Central to the AI Strategy
Epic is more than a game publisher.
It develops Unreal Engine, one of the industry’s most widely used real-time 3D development platforms.
Unreal Engine supports video games, film production, virtual environments and other applications.
AI-assisted tools integrated into development workflows could have implications beyond Epic’s own games.
If successful, they might influence how independent developers and major studios produce software and visual assets.
However, the reported Disney project directive should not be interpreted as confirmation that Epic has released a universal AI-only requirement for all Unreal Engine users.
The available reporting concerns an internal development project and Epic’s broader organizational direction.
Developers using Unreal Engine retain their own production choices unless specific product terms require otherwise.
What the Decision Means for the Gaming Industry
The move could become a major reference point in the industry’s debate over generative AI.
Large game studios have been searching for ways to reduce costs and improve production efficiency.
Major releases can take years to complete and require hundreds of employees.
Delays can place additional financial pressure on publishers.
AI may offer new ways to accelerate certain tasks.
But the medium depends heavily on artistic direction, gameplay design, technical polish and player satisfaction.
Automating content creation does not automatically make an experience entertaining.
Players ultimately judge whether a game is enjoyable, reliable and worth their money.
The industry’s central challenge is to determine whether AI can improve development without weakening those qualities.
Could the Controversy Affect Gamers in Asia and the Philippines?
Epic’s development decisions have international relevance because Fortnite and Disney’s franchises attract players around the world.
Asian audiences are important participants in gaming, digital entertainment and online communities.
The Philippines also has artists, programmers, animators and creative professionals working in game development and related digital industries.
Expanded AI adoption could change the skills sought by employers.
Routine production tasks may become more automated, while demand could increase for developers able to supervise AI workflows, test outputs and maintain technical quality.
However, the Bloomberg investigation does not establish that Epic is laying off Filipino employees or relocating the Disney project to the Philippines.
Such claims would require separate evidence.
For local creators, the broader lesson is the importance of combining technical adaptability with strong creative and analytical skills.
What Happens Next for the Disney–Epic Partnership?
Several developments will determine the impact of the reported delay.
New release timetable: Epic has not provided a confirmed replacement date for the unannounced shooter.
Project announcement: The company has not publicly revealed the game’s final title, pricing or complete gameplay features.
AI development performance: The results will depend on the quality and reliability of the new production process.
Employee feedback: The extent to which developers adapt to AI-first workflows may influence implementation.
Disney’s response: The company has not publicly provided a detailed assessment of the reported delay.
Broader gaming universe: The multiyear partnership remains separate from the status of this individual title.
Fan reception: Players’ reactions will matter once the companies reveal playable content.
The most important test will be whether Epic can deliver a successful game, rather than simply demonstrate that it used AI during production.
The Bigger Question: Is Epic Leading the AI Gaming Revolution or Taking a Dangerous Gamble?
Epic Games has built its reputation on influential gaming technology and one of the world’s most recognizable live-service games.
Its partnership with Disney represents an opportunity to build a larger entertainment ecosystem around globally popular characters and franchises.
But the delayed Marvel–Star Wars shooter arrives at a difficult moment.
The company has reduced its workforce, acknowledged financial pressure and now reportedly instructed developers to restructure a major game around generative AI.
Supporters see an opportunity to accelerate creation and reduce repetitive work.
Critics see risks involving technical quality, artistic consistency and the future of skilled developers.
The outcome could influence how other companies approach AI-assisted production.
Yet there is a crucial difference between producing a game with fewer manual steps and producing a game that audiences actually want to play.
Epic Games has delayed its Disney shooter while betting heavily on AI-generated code and art. But the bigger test lies beyond automation: Can artificial intelligence help deliver a Marvel–Star Wars experience worthy of its iconic franchises — or will this experiment become a warning about replacing creative workflows before the technology is ready?
