Epic Games Reportedly Tells Disney Shooter Team to Stop Hand-Coding and Go AI-First

News Summary

Epic Games, the maker of Fortnite and Unreal Engine, has reportedly told developers on an unannounced Disney-licensed shooter to switch to an "AI-first" production model, with AI tools such as Anthropic's Claude doing the bulk of the coding and art generation while people steer and review the output. The reports, which surfaced around October 12, 2026 (Eastern Time dates, no exact publication times confirmed), say the game has also been delayed indefinitely. Epic has not published the internal messages, and the details below come from secondary coverage of the original reporting.

What Was Reported

According to coverage that traces back to Bloomberg's reporting, developers on the project were told last week that the game would use an AI-first production approach. A director reportedly instructed the team to stop writing code by hand and to generate all art through AI workflows. Humans would manage and guide that work rather than produce it directly. Outlets including Video Games Chronicle, Neowin and GameDev News carried versions of the story, and the headline framing varied from "AI-first development" to "all-AI code and art."

The Disney Connection

The game is described as a shooter built around Marvel and Star Wars characters, made under the partnership that Disney and Epic announced in early 2024, when Disney took a $1.5 billion equity stake in Epic to build a Fortnite-connected entertainment universe. Reports say the shooter had been aiming for a release around March 2027, and that the schedule has now slipped with no new date. Earlier reporting this year had also described a Disney-themed extraction shooter with a possible November release, so details of which project is affected remain partly unclear in public coverage.

How Epic Responded

An Epic spokesperson said the company is "embracing AI-accelerated development, led by Epic developers who are the visionaries and creative drivers for everything we do." CEO Tim Sweeney reportedly called the shift a "huge pivot" for the company. He also said the goal is not to do the same work with fewer people, but to let everyone at the studio build more and better things. Staff were reportedly surprised by the directive, with some hoping it was not a firm mandate.

Background: A Year of Restructuring

The AI push follows a difficult period for the studio. On March 24, 2026, Epic announced layoffs of more than 1,000 employees, citing a decline in Fortnite player engagement that began in 2025 and spending that had outpaced revenue. The company said it had identified over $500 million in cost savings across contracting, marketing and unfilled roles. Sweeney said at the time that the cuts were not related to AI. That earlier round followed a September 2023 reduction of 830 staff, then about 16% of the workforce.

Why It Matters for Game Development

Generative AI is already common in coding assistants and concept work across the games industry, but a mandate that covers production code and final art on a major licensed title would be a notable step. It raises practical engineering questions: how teams review and test machine-written code at scale, how art direction and consistency are maintained when assets are generated, and how licensors such as Disney, which has strict approval processes for its characters, treat AI-made content. Earlier Disney and Epic AI experiments, such as an AI-voiced Darth Vader character in Fortnite, showed both strong player interest and the need for guardrails.

What to Watch Next

Key open points include whether Epic confirms the scope of the mandate, whether Disney comments on AI-generated assets in its licensed games, a new release window for the shooter, and whether the approach extends to other Epic projects or to tools offered to Unreal Engine developers worldwide. Until Epic or Disney publish details, the specifics should be treated as reported rather than confirmed.