Epic Games has delayed its untitled Disney project featuring Marvel and Star Wars characters and reorganized it as an "AI first" development effort, according to a Bloomberg report published this week. The report, summarized by The A.V. Club on October 12, says the company concluded it had underestimated how many people the game would require — and that its answer is a production pipeline in which code and content are generated with AI workflows rather than written by hand.

The pivot lands at a delicate moment for the North Carolina-based studio. In March, Epic laid off roughly 1,000 employees after what the company described as a downturn in Fortnite engagement, a cutback Bloomberg's report now frames as having removed people the Disney project would come to need. For more coverage of how AI is reshaping major employers, see our AI industry coverage.

From Layoffs to 'No More Hand-Written Code'

According to the report, the game — originally set for a March release — slipped after Epic realized its post-layoff headcount could not support the scope of a project carrying two of Disney's most valuable franchises. Last week, leadership told staff there would be "no more hand-written code" and that the game would be "generated with full AI workflows."

The reception inside the company was reportedly grim. Bloomberg's reporting describes employees as "stunned" by the announcement, with some initially hoping it was a joke — a reaction that echoes the tension running through the games industry as studios weigh AI-driven production against the craft concerns of the people who build these worlds.

An Epic Games spokesperson confirmed the direction to Bloomberg, saying: "We're embracing AI-accelerated development, led by Epic developers who are the visionaries and creative drivers for everything we do." The statement positions the shift as augmentation rather than replacement — though it does not address how a team reduced by a thousand people is expected to supervise, review and integrate machine-generated code and assets at the scale a Marvel and Star Wars title demands.

What 'AI-First' Means in Practice

Details of the workflow remain thin in the report, but the framing — full AI workflows replacing hand-written code — describes something more ambitious than the code-completion assistants most studios use. It implies AI agents generating production code and, likely, AI-generated art and audio pipelines, with human developers shifted toward direction and review. The financial logic is easy to see: Epic has spent the past year building AI systems, and AI-first production promises to stretch a smaller team across a franchise-sized workload.

The risks are just as visible. Code review becomes the bottleneck — a dynamic Harvard researchers documented this month in a study of 700 software firms, where AI coding agents increased lines of code by 30 percent without moving the needle on completed features. In game development, where console certification, licensing approvals and performance budgets already constrain pipelines, swapping human authorship for generated output adds a new layer of uncertainty to a project that has already missed its original date.

Disney's Careful Embrace of AI

Disney declined to comment for Bloomberg's report, but the company's posture toward AI has been warming. Less than a year ago, Disney added user-generated AI content to its Disney+ streaming app — a deal that ended when OpenAI's Sora 2 was shut down in September, according to The A.V. Club. Disney has also made organizational moves, appointing its first-ever chief technology officer in September, a hire widely reported as a signal that the century-old media giant intends to take direct control of its technology strategy, including AI.

That context makes Epic's AI-first pivot easier to read as strategy rather than improvisation. Disney licenses its characters with exacting standards for brand safety, and an AI-generated production raises questions — about output consistency, IP provenance and the review burden — that both partners will need to answer before the game ships. Neither company has announced a new release date for the project.

An Industry Watching Nervously

The episode is being closely watched across the games industry, where AI adoption has become the sector's most contentious workplace issue. Epic is not alone in pushing AI deeper into production, but the combination of a high-profile licensed franchise, a recent mass layoff and an explicit "no more hand-written code" mandate makes the Disney project a test case for whether AI-first development can deliver at AAA scale — and at what cost to the workforce that remains.

For Epic, the bet is that AI acceleration can close the gap left by the layoffs. For the industry, the report adds to a growing file of evidence that AI is moving from tool to production strategy at the biggest studios — whether employees are ready or not.

---

Stay Ahead of AI

Get the latest AI news, analysis, and breakthroughs — all in one place.

Read more AI news →