Epic Games’ Disney Game Faces Delays and An AI Overhaul After $1.5 Billion Investment

Epic Games Inc. is pausing the release of its upcoming video game collaboration with Walt Disney Co., (NYSE:DIS)/a> and has told its developers to use artificial intelligence tools to help complete the game.

The game, which was slated to debut in March, is now on pause and no new date has been revealed, sources familiar with the matter told Bloomberg.

The announcement caught some Epic developers off guard during a video call last week. People familiar with the discussion said that several developers questioned how they would address flaws in AI-generated work, joking they might have to ask Claude to correct its own errors. /p> div class="bz-read-next-block" data-variant="card" data-news-mode="manual" >

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Others expressed hope that the directive was not final and that Epic would reconsider its approach, voicing doubts about whether the initiative would deliver the results the company expected, Bloomberg noted.

Prior to this announcement, Epic Games had been increasing the use of AI across all of its divisions, although this marks the first time a major video game company has sought to build a title predominately with the use of AI.

"We’re embracing AI-accelerated development, led by Epic developers who are the visionaries and creative drivers for everything we do," said Jake Jones, communications director at Epic Games, in a statement to Bloomberg News.

The development of the new game has been moving at a slower pace than expected, due to a lack of awareness regarding the number of staff members and how much time the game would take to produce.

In 2024, Disney invested $1.5 billion in Epic Games, securing an equity stake and entering a multi-game partnership with the company. The collaboration was expected to begin with a shooter game.

In March, CEO Tim Sweeney told employees that a downturn in Fortnite engagement that began in 2025 meant Epic was "spending significantly more than we’re making." The company announced more than 1,000 layoffs and said it had identified more than $500 million in savings through reductions in contracting, marketing and open positions.

The cuts followed another major round of layoffs in 2023, when Epic eliminated roughly 830 positions.

While Fortnite continues to attract a massive audience, engagement has weakened. Reuters reported that while Fortnite remained among the most-played games, average playtime had fallen, creating a challenge for a live-service business that depends on keeping players engaged and spending.

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