Rumor mill: Epic Games is trying to engineer a turnaround on two fronts at once: cutting costs after a sharp drop in Fortnite engagement while betting that a slate of Disney projects can restore its momentum. At the center of that strategy is a reported Disney-themed extraction shooter, the first in a planned run of new titles that insiders say will help determine whether the company can recover from recent misfires and layoffs.
Last month, Epic Games laid off about 1,000 employees as part of a $500 million cost-saving push, following the poor performance of several new games and Fortnite updates. On April 16, Epic will shut down Fortnite's Ballistic mode and Fortnite Festival Battle Stage. Rocket Racing will follow in October.
"Despite Fortnite remaining one of the most successful games in the world, we've had challenges delivering consistent Fortnite magic with every season," founder and chief executive officer Tim Sweeney said in a blog post announcing the cuts. He added that the company will look for ways to deliver "fresh seasonal content, gameplay, story, and live events."
Amid that retrenchment, Epic is leaning on its partnership with Walt Disney, which agreed to invest $1.5 billion in the firm two years ago. Conversations Bloomberg had with four current and former Epic employees indicate the company plans to use that deal to build a new game featuring Disney characters in an extraction-shooter format similar to Embark Studios' Arc Raiders, in which players battle enemies to reach an extraction point.
According to those people, Epic is targeting a November 2026 launch, though internal reviewers have warned that the gameplay loop and mechanics are "not very original," even as some staff members remain hopeful they can be improved before release.
The deal is expected to yield at least two more games, though early versions of the second title drew middling internal reviews, and resources for a third were shifted after reports that Disney was unhappy with Epic's release timeline.
Inside Epic, the pressure is high. The company has been regarded as one of the most respected operators in video games since Fortnite exploded into a global phenomenon in 2017, earning $9 billion in its first two years and helping drive a valuation that reached $32 billion in 2022.
More recently, employees told Bloomberg that Epic pushed out new products and Fortnite modes on compressed schedules, often in what some staffers called "Version 0.5" form, and that several high-profile initiatives – from its mobile store to user-generated content tools – fell short of internal expectations. Sweeney acknowledged that Epic had struggled to consistently deliver the Fortnite experience players expect.
Epic executives say the Disney effort is broader than a single game launch. "Bloomberg's reporting is not reflective of the ambitions of the Disney collaboration," said Liz Markman, Epic's senior director of global communications. She said the company sees the Disney partnership as the foundation for a broader games-and-entertainment universe built around Disney properties.
Markman described Epic's development schedules as inherently aggressive and said the company has shifted many developers onto projects nearing release, while keeping smaller teams focused on earlier-stage prototypes that are further out.
For Epic, the Disney project is both a creative gamble and a test of whether its aggressive development culture can still produce hits in a more competitive, slower-growing market. The company's first Disney shooter is intended as a centerpiece of that strategy; whether it arrives on time and how it lands with players will help determine whether Epic can rediscover the "Fortnite magic" it is now openly chasing.