Epic Games Goes All In On AI For Disney Shooter

Hello, one takeer here. This week I broke the news that Epic Games, the company behind Fortnite, had delayed an upcoming collaboration with Disney and told developers on the project that they were going allin on AI, turning it into an AI first production. Quite a story. Let's start from the very beginning. 2 and 1/2 years ago at the beginning of 2024, Disney announced that they had put in an investment in Epic Games of 1 and a half billion dollar billion with a B. And that investment came in exchange for an equity stake in the company. Epic Games is privately held. They are not publicly traded. They are privately owned. The majority owner is Tim Sweeney who is the founder and CEO of the company. Um, so Disney can go up to Tim Sweeney and his board and say, "Hey, we want to we want to invest some capital

in exchange for equity and they can get it without uh normally if you're a publicly traded company, you would have to buy that equity on the market. So it would be a very different process." And as part of that stake, they also announced a collaboration um to make games together. And there were a lot of questions about what that might meant. Um, some of what that has meant is a lot of um, working together on Fortnite, which has become this kind of uh, brand nexus where pretty much any Disney IP you can think of is in Fortnite in some way or another or has been in Fortnite or some in some way or another. One of the most popular, in fact, was The Simpsons, which is owned by Disney since Disney bought 21st Century Fox a few years ago. Kind of weird that the same company owns Marvel and Star Wars and Alien versus Predator and The Simpsons, etc., et, etc., but that's the world we live in. So, they had a plan to make a few games. The first of these games, none of these games have been announced officially, but the first of these games

um is going to be a shooter, and it's been kind of planned as an extraction shooter. My colleague Sicilia Dastasio at Bloomberg reported earlier this year about this extra that Disney and and Epic were working on an extraction shooter together. Um, which essentially means that Epic is making it and Disney is licensing it. And I reported in the story this week that it's actually a Marvel, it's got Marvel and Star Wars characters. Um, might have more. I'm not 100% sure, but Marvel and Star Wars is kind of the big focus of it. That game, uh, development on that game has not been going great. I would say it's been delayed once or twice. It was planned for this fall and it slipped to March. And last week, Epic told staff on the project that they were delaying it even further. they were not going to release in March. And what they essentially said was, "Hey, um, we we have faith in this project and we know things aren't going well, but we're going to get this back on track." And part of how we're going to do that is going all in on generative

artificial intelligence. Epic as a company has been embracing AI for a long time now. Tim Sweeney, the CEO, is very much all in on AI. They have been playing around with Claude constantly doing game jams using Claude to create things. They have seen according to people I've talked to there are all across the company they have seen what they see as promising results from AI. They have been amazed at just the progress of cloud code in particular over the even just this year alone and what they can do with it. How quickly they can go from ideas to prototypes to implementing things. Now, of course, AI is extremely controversial for a whole lot of reasons. There are people have concerns about data centers and the effects that those are having on the world and on the on the United States. um the AI uh the data centers, not only do they kind of uh uh bring all sorts of

issues to the towns that they are in, they've also created this memory shortage crisis that has uh impacted the entire video game industry and other industries leading to uh hardware console console prices going up, console shortages, people finding it impossible to buy RAM and storage um uh without paying exorbitant prices. Just look at the price of the PlayStation 5 Pro right now. I believe you can get one on the used market for about $1,400, which also just wait. I mean, uh, PlayStation 6 is in the in the works, uh, and and Xbox's Project Helix, and we'll have to see how those go. Um, especially if they wind up being more than $1,000 each. So, um, AI is controversial for other reasons, too. Of course, there's the copyright issues, plagiarism issues. Um, they've certainly they've stolen my books. I'm part of a class action lawsuit against Sananthropic, uh the maker of Claude, um which is paying off all these authors. They they settled and are for like a

billion dollars and are paying off all these authors, uh whose books they stole and used to absorb Claude. Um there's the AI slop factor where a lot of videos and images that you see online that are made by AI have this kind of certain aesthetic that I think is really um really turns off a lot of people. Um, if you've ever seen some of those videos floating around on X that are just kind of AI created, there's something uh kind of weird and off-putting to watching them and they all kind of look the same. And of course, AI makes mistakes constantly. Anyone who's tried to use chat GPT or clawed for just kind of regular parts of their workday has found that it is full of errors constantly. Although of course people who are using the most kind of high-end models, the frontier models that you have to pay for have found that they lead to better results. So, Epic Games has been all in on AI despite those controversies and despite the fact that a lot of gamers hate AI and a lot of people have been

actively saying online. We'll see how much this leads to tangible results, but a lot of people have been saying online that they will not play or buy or or even look at any games that are related to AI that that are use AI in some way. So, uh, what's the situation now? Well, so Epic Games has been using AI, but this is kind of the first time that they've really said on an entire game project, they've looked at it and said, "Hey, we are going all in on AI this time. We are going to be an AI first production on this game." Um, so this game, by the way, um, one of the reasons that it's been it's it's been kind of it's been slow in the works for I think a few different reasons. Um things I've heard are like um uh kind of slow decision-m, conflicting decision-m, a lot of pivoting, a lot of changing, which is kind of part for the course at Epic. Epic is a company that just by nature um make like makes decisions and

pivots really quickly. Um Fortnite is a good example of that. uh they pivoted to a battle royale mode after the game came out and uh did that very quickly and looked at PUBG and the popularity of that and pivoted to battle royale very quickly and wound up exploding in popularity as a result of that. Um I think one factor also is that Epic hasn't made a a new game since Fortnite. They've been shipping a lot of stuff, seasons and content that is added to Fortnite, which is its own kind of challenge, but um they don't have the kind of uh when you haven't shipped games in a while, you kind of lose some of that uh expertise and familiarity with the process and maybe they underestimated some of the resources it would take, some of the manpower it would take, etc., etc. So, point being that the game is in in in kind of a tough spot at the moment. So they said okay now we are going to be an AI first production model using tools like claude and then humans are just going to kind of manage and supervise. Um and so in this uh Slack message that I saw that one of the directors um shared with

staff they essentially said quote no more handwritten code and all art for the game will be generated with quote full AI workflows. Um they said no more no more like handcripted blueprints etc etc. There's a bunch of stuff in there. Um, ironically, the message that I saw appeared to have been written with a chat GPD or clawed uh generative AI model because it's like written in that kind of a classic AI way. Can't say that for sure. I I got to say I can't I I don't know that for sure, but it looked like that. It had all the hallmarks of AI written stuff, which by the way, you want to talk about uh reasons people hate AI, that might be the thing that bugs me the most is just the way that it is kind of like churned writing on the internet into this like specific type of of sloppy, ugly, gross writing. And just as a professional writer, someone who loves the craft of writing, I just can't stand seeing it. It just drives me crazy when I see those those kind of hallmarks of AI writing. Um, and so, uh, they

announced this last week to staff. They said, "We are delaying the game. Um, we don't have a new release date yet, but essentially we want to focus on AI and spend the next few weeks just kind of really focusing and experimenting and figuring out what you can do with Claude on this project. Use Cloud to write code. Use Cloud to do assets. Use Cloud to do everything. It's not just engineering." Um, by the way, quick tangent here. Um, in the video game industry right now, a lot of companies are using AI. um a lot of them and a lot of people are experimenting it most heavily with back-end work like programming um quoteunquote vibe coding using cloud code to assist them in some way or another. This is a lot this is extremely common in the especially in the AAA space right now. I think it's less common in the world of uh front-facing stuff, AI assets, stuff like that because that's where a lot of people know that it's going to be controversial. Um, but it is extremely common at game companies to be using AI right now. Um, I think that uh uh I've

heard just anecdotally from engineers that having a clawed code assistant or agent or whatever can be um uh more useful to them in some ways than like having another person, a junior engineer. So that that is something to keep in mind. Um, but this is the first time that I've seen a major video game company at least publicly say like, "Hey, we are going allin on AI development, AI first development, etc." Um, I want to read some quotes from Tim Sweeney. So, Tim Sweeney actually ahead of the story that I ran yesterday, he tweeted something that kind of seemed like it was out of the blue. I'll explain in a second. Um, but he said, uh, let me pull this up. He said, quote, "We have a huge pivot underway here at Epic, moving developers around to retool for maximum AI acceleration. The aim isn't to do the same stuff with fewer people, but to enable everyone here to build more and better stuff and to bring the benefits to all teams using Unreal." Um, I'll get to the Unreal part in a

second, but first, a little bit of inside baseball. Um people might not know this but when you are a reporter kind of traditional journalistic practice journalism is the kind of two big principles you always want to um kind of worship if you're doing reporting is fairness and accuracy. You always want to be as accurate as humanly possible ideally 100% truthful and accurate in everything you report. And you always want to be as fair as possible. Um fairness is very different than kind kind of like objectivity or even um kind of uh like both sides. It's like fairness does not mean giving equal weight to both sides. It just means being fair to the people that you cover and the companies you cover. So what that means in practice is that every time I and every time any kind of professional journalist working for a reputable outlet, Bloomberg, the New York Times, Wall Street Journal, etc., Anytime one of us uh covers a company or a person, um ideally we will give them a uh we will give them a kind of a a full overview of exactly what we plan to write about and give them a reasonable amount of time to respond to that and

give their perspective because that is a basic principle of fairness. If I'm writing something about you, especially something that might be negative, you deserve to hear about it in advance and you deserve the opportunity to respond, the right to respond to what I'm saying. And if you respond, I will include it in my story in some way. If you don't respond, I will account for that in my story. So, what happens often, not often, but but every once in a while is I will reach out to a company. I will say, "Hey, I'm doing this, this, and this." And they will try to preempt it by putting out a statement on Twitter, by putting out a blog post. Um, I remember once back in the day, way back in the day, like 11 years ago or something like that, I was planning on breaking the news at Kotaku where I used to work, that um, Bungie was planning on adding microtransactions into Destiny for the first time. And, uh, I remember I gave him a heads up. Uh, it was like a a weekday evening, East Coast time. So, it's like 5 or 6 East Coast time. And I gave him a heads up and then I went to uh, and I left the office and got on the subway to head home cuz I was planning on running a story the following morning. and I wanted to make sure they

had like a full full evening and and morning to respond to this. Um, and as I'm heading to the subway, I see that Bungie has put up a blog post doing their own version of the announcement. Um, which I mean their prerogative, of course, but we'll it's I told them, well, we'll see how much time I give you next time. But anyway, no, that's kind of being facitious. I mean, that's that's the kind of the downside to approaching this in a fair journalistic way. Anyway, in this case, I gave Epic a heads up and they chose Tim Sweeney chose to tweet about it a little bit in advance by doing this kind of generic AI tweet. Um, anyway, what he's saying back to get on but tangent over back to uh the actual subject at hands here. He's saying that they're going all in on AI. Um, and that includes the Unreal Engine. And that is an important part of this equation because Epic Games, not only do they make games such as Fortnite and this new Disney shooter that they're working on, they also are responsible for this, the Unreal Engine, which is this um an engine essentially in game development is is a suite of tools that

is used to make games. You use Unreal to make games that includes all these different features that you can use to um actually develop a game with. So you don't have to just like write graphics renderers from scratch and stuff like that. It's got it's very helpful if you are trying to make a game. Um, and so, um, uh, making the newest versions of AI, uh, Unreal heavily into AI and putting a lot of AI features in them will have a huge impact on the way games are made because you Unreal is so ubiquitous in the video game industry. So many different companies use it. So, that is a big deal as well, a big part of this as well. Um, another quote from Tim Sweeney, this is him responding to someone else. Someone asked if he's planning on accelerating an IPO, if he's planning on taking Epic public. He said, quote, "Our more modest aim is to survive the AI revolution, help other developers do the same, and come out on the other end making better code and content faster." Tim Sweeny's belief essentially, um, here's another quote. Um,

uh, here's another tweet response to him, uh, tweet response from him to someone else. Quote, uh, this is, okay, so I'll read this. This is from someone tweeting in response to him said, "Your inability to read the room is really, really astounding, Tim." And Tim responded saying, "Much of the room wants it to be 2016 again, but it's not. Our job as a provider of tools and technology to much of the industry is to design for the present that is, and the future will soon be. That will soon be. Personally, I'm optimistic about it and see it as empowering for creators. In other words, Tim Sweeney and therefore Epic Games believes that the the AI revolution, whatever you want to call it, is coming. That AI is inevitable and they want to be on the vanguard of that. They want to be ahead of it rather than falling behind. And so they believe in going AI first on their games and their engines. Um, so there are a few things to uh impact of all this. Oh, and by the way, one other important factor here, of course, is that in March, Epic Games uh laid off a thousand people, um in part

due to Fortnite kind of losing momentum, going losing a lot of, uh kind of players and and revenue and whatnot. Um so, uh so that's where we're at. So, what there are a couple things to unpack here. One is this game. I'm very curious to see what happens with this game. Um, this is a very useful just kind of test case for a lot of people looking at AI and what it can and can't do in the video game industry and how it's changing. And it'll be really interesting to see if this game comes out on time, if it's good, if it's fun to play, if it looks good, if it sounds good, if it feels good, and how more how much like whether AI actually led to the efficiency and the production gains that uh people are looking for from it. Um, the other part of that equation is will players care or will players revolt? Will players actually live up to the kind of like social media outcry about AI or will it be like one of those kind of classic like no discs no buy and then

people just buy it anyway or like we're all boycotting Call of Duty and then they're all playing Call of Duty if you've seen that famous beam. Um, so that's another thing to keep an eye on is like will people actually care about AI in a game or will they look past it or will most people not even know? Um, what will the like if if this game comes out next fall, fall of 2027 or something like that? Um, will AI have just kind of completely changed the world in other ways or will the backlash have gotten so strong that like people are moving away from it? Well, the bubble um financial part of it have popped because a lot of stocks right now, especially tech stocks are just being kind of uh going going very high as a result of promises about AI and the efficiency gains and the revenue gains that it will bring. Um who knows what's going to happen there. A lot of open questions. Um, one thing that I can say for sure is that uh I think a fair number of people at Epic are kind of confused and uh stunned by

this particular announcement and the idea that they would be kind of supervising AI to build a video game. Um, I think people even the people who are just kind of most most AI optimistic I would say are a little bit baffled by how all of this will work. And uh I'm very curious to see what it looks like in practice when you have Claude doing the kind of fundamentals and the baseline of your game games development and your pipelines and how whether that causes extra work or uh or whether it actually leads to efficiency gains and whether the potential controversy uh is is outweighed by whatever you gain from all of this. But it will be it will certainly be interesting to look at moving forward. Um yeah, I I think uh I don't know. I have I have a lot of conflicting opinions about all of this. Um but as someone who

has been I I'll speak personally for a second. Um uh as much as uh uh I'm sure Blue Sky would be would get mad at me for saying this, but I have tried to be open-minded when it comes to AI as any as I would be with any technology. Even NFTs I tried to be open-minded with. It's very clear that NFTs had no use case, but I tried to be open-minded. Um and I uh have played around with Chat GPT and Claude plenty. Um, and sometimes I find them useful, but often times they make so many mistakes that uh I just find that doing it myself would have been less time, would have taken less time. Um, that said, I've been playing around with the free models. Maybe the pay models are significantly better and have way fewer mistakes. I don't know. But I have found that the technology um is is more useless than not just because of the sheer number of mistakes that it is making constantly. And I mean all sorts of mistakes, not just kind of factual based stuff, but like

mathematical mistakes, just basic errors, like fundamental errors in just the way that it produces stuff. It's just it's so riddled with mistakes that it's really hard to take it seriously. Again, at least the free versions that I've played around with. That said, I don't know. I will be keeping an eye on Epic in the months to come because it's as a reporter I am very curious to see what happens next and I will be asking lots of questions and uh maybe doing future stories and maybe watching Tim Sweeney try to tweet to get ahead of them. Um, all right. I'll leave you all with a a little bit of a teaser, which is that um tomorrow, Wednesday, October 14th, I've got a very big story dropping that I think many of you are going to be very interested in reading and I'm very excited to talk more about it. I will be doing more videos about that throughout the week. Um, and I'll give you uh a little hint. It's about a very big video game. All right, I'll see you all next