Just over half of game developers believe generative AI is detrimental to the industry, according to a report published earlier this year. During The State of Unreal keynote at Unreal Fest, Epic Games detailed its approach to generative AI in Unreal Engine (UE) and announced the release of Unreal Engine 5.8, which includes an experimental Model Context Protocol (MCP) plugin. This plugin will enable developers to integrate generative AI models such as Claude and Gemini into Unreal Engine and is expected to be a core component of Unreal Engine 6 (UE6).
Marcus Wassmer, head of Epic’s development team, stated that generative AI models can enhance creativity and productivity by reducing time spent on manual tasks. He mentioned in a blog post, “our goal for UE6 is to greatly reduce the tedious work in authoring content to leave more time for creative exploration.” UE6 will allow developers to choose and implement their preferred models tested against internal development and Unreal Engine for Fortnite (UEFN).
Epic demonstrated the integration of Claude Code with Unreal Engine during the keynote. This functionality allows the pulling of objects from an asset library into a virtual environment, while developers can still adjust object placements manually within the UE editor. A demonstration showcased how a developer might use Claude Code to build a city that adapts as new assets, such as parks, are added. The system can also adjust lighting and atmospheric conditions based on real-world examples.
The MCP plugin is designed to automate asset creation, testing, and optimization by accessing core Unreal Engine systems such as blueprints, assets, levels, materials, and meshes. Tim Sweeney, Epic’s CEO, indicated that a “made with AI” tag could become relevant for art exhibits and digital content licensing in future game productions.
According to the Game Developers Conference’s 2026 State of the Game Industry report, 36% of over 2,300 surveyed game industry workers reported using generative AI tools at work, with 52% expressing that it has a negative impact on the industry. This figure has increased from 30% in the 2025 report and 18% in 2024, while only 7% reported a positive effect.
At Unreal Fest, Epic announced plans to merge Unreal Engine 5 and UEFN into a single platform in UE6. It is also testing the capability to transfer Fortnite skins to other UE6 games and vice versa. UE6 is slated for early access in late 2027, with a full release expected 12 to 18 months later.
Epic also confirmed several upcoming collaborations, including the ability to create Fortnite experiences based on The Simpsons and over 30 gaming collaborations planned for the year, such as Sonic Racing: CrossWorlds and Vampire Survivors. However, Poncle, the developer of Vampire Survivors, expressed concerns regarding Epic’s use of generative AI for asset creation, stating that they are currently reviewing their collaboration with Fortnite.
