Google's Project Genie AI tool sends video game stocks tumbling as investors fear disruption

Video game company stock prices dip after Google introduces an AI world-generation tool

The stock prices of some major video game companies, including Take-Two Interactive, Roblox, and Unity, had notable declines on Friday, just a day after Google announced its Project Genie tool that lets users prompt AI to generate interactive experiences, Reuters reports. Take-Two's stock price closed at $220.30 (down 7.93 percent from yesterday), Roblox's closed at $65.76 (down 13.17 percent), and Unity's closed at $29.10 (down 24.22 percent). Other AI tools have received significant pushback from artists and creators over allegations of theft of their work to train the underlying AI models, AI's water and electricity usage, and what this means for creative output. Google DeepMind's Diego Rivas told The Verge that Genie 3, the AI world model powering Project Genie, was "trained primarily on publicly available data from the web," and a whitepaper from Google DeepMind researchers about the first Genie model said that it was trained from "a large dataset of over 200,000 hours of publicly available Internet gaming videos." Many game developers are already very skeptical of generative AI and its hand in seemingly ripping off existing works to let people create AI slop. The Super Mario and The Legend of Zelda-like worlds I was able to create from prompts with Project Genie somewhat resembled Nintendo's actual games, but the experiences didn't have any of the fun or playability of the originals. For an industry already grappling with wave after wave after wave of layoffs, even the current form of Project Genie represents a pitch to replace work like testing and concept building. The version of Project Genie Google presented this week can only make interactive experiences that are 60 seconds long. They have no scores, objectives, or even sound. They can have strange errors and inconsistencies, like a racetrack road unexpectedly turning into grass. When you're done with an experience, you can only download a video of it or generate a new one; you can't take what you've made in Project Genie and slot it into a traditional game development tool like Unreal Engine or Unity. But the push by investors and executives for AI game creation tools is already being spelled out. xAI CEO Elon Musk has promised "Real-time, high-quality shows and video games at scale, customized to the individual, next year." Epic Games CEO Tim Sweeney said Friday that "We'll see constant leapfrogging between engine centric AI and world model centric AI until they come together for maximum effect." Meta CEO Mark Zuckerberg went long on the company's earnings call this week about how AI will help games feel "more immersive and interactive," making his comments just a couple of weeks after shutting down VR game studios and projects.

Unity, Video Game Stocks Fall as Google's AI Tool Sparks Fears

Unity Software Inc. and video game stocks plunge Friday on fears of possible artificial intelligence disruption after Google began to roll out Project Genie. Shares of San Francisco-based Unity sank as much as 28% -- the worst one-day drop since 2022. Video game developers Take-Two Interactive Software and CD Projekt SA also saw their stock fall 9.3% and 8.0%, respectively, while online gaming platform Roblox Corp. dropped 15%. "The price reaction is further evidence of the 'shoot first and ask questions later' fears attributable to AI uncertainty that have weighed on sentiment throughout the overall software space in recent months," wrote William Blair analyst Dylan Becker in a Friday note on Unity to clients. The decline comes as investors parse out the threat of AI tools like Google's Genie, which could upend the creation of video games. It also mirrors an earlier selloff in a group of software-as-a-service stocks following news about the capabilities of Anthropic's Claude tool. Still, Becker remains undaunted, seeing opportunity for investors to buy the dip in Unity shares. Fears about the ability of Google's platform to devour market share from Unity, which is used by roughly 70% of the top 1,000 mobile games, "overlook" the similar AI capabilities currently embedded within Unity's platform, Becker said, adding that concerns are "overblown." The prototype web app of Google's AI tool Genie allows users to create and interact with a navigable world for $250 a month compared with Unity's pro subscription which costs users $210 per month. While Google's AI tool "is unlikely to threaten EA, Take-Two, Roblox or Unity in the medium term," Bloomberg Intelligence analyst Nathan Naidu, warned in a note that it "could pose longer-term risks if it evolves into a platform capable of producing commercially viable games."

Videogame stocks slide on Google's AI model that turns prompts into playable worlds

Jan 30 (Reuters) - Shares of videogame companies fell sharply in afternoon trading on Friday after Alphabet's Google (GOOGL.O), opens new tab rolled out its artificial intelligence model capable of creating interactive digital worlds with simple prompts. Shares of "Grand Theft Auto" maker Take-Two Interactive (TTWO.O), opens new tab fell 10%, online gaming platform Roblox (RBLX.N), opens new tab was down over 12%, while videogame engine maker Unity Software (U.N), opens new tab dropped 21%. The AI model, dubbed "Project Genie", allows users to simulate a real-world environment through prompts with text or uploaded images, potentially disrupting how video games have been made for over a decade and forcing developers to adapt to the fast-moving technology. "Unlike explorable experiences in static 3D snapshots, Genie 3 generates the path ahead in real time as you move and interact with the world. It simulates physics and interactions for dynamic worlds," Google said in a blog post on Thursday. Traditionally, most videogames are built inside a game engine such as Epic Games' "Unreal Engine" or the "Unity Engine", which handles complex processes like in-game gravity, lighting, sound, and object or character physics. "We'll see a real transformation in development and output once AI-based design starts creating experiences that are uniquely its own, rather than just accelerating traditional workflows," said Joost van Dreunen, games professor at NYU's Stern School of Business. Project Genie also has the potential to shorten lengthy development cycles and reduce costs, as some premium titles take around five to seven years and hundreds of millions of dollars to create. Videogame developers have been increasingly adopting artificial intelligence as a way to stand out in a highly competitive industry dominated by large players. A Google study last year showed that nearly 90% of game developers use AI agents. However, the use of AI in videogames is a contentious topic, with many fearing that the technology could lead to a wave of job losses, after the industry went through record layoffs over the past few years as it recovered from a post-pandemic slump. Reporting by Zaheer Kachwala in Bengaluru; Editing by Vijay Kishore Our Standards: The Thomson Reuters Trust Principles., opens new tab

Google's new AI 'world model' has seemingly spooked videogame investors, but it's hard to know what it will actually lead to

Google launched a new AI product this week, and as Seeking Alpha points out, videogame-related stocks like Unity and Take-Two took a dip. If those share price fluctuations really were a reaction to Project Genie, which was first revealed last year and is said to generate interactive "worlds," it's awfully premature -- this doesn't do anything to GTA 6's prospects, let's be real. But The Verge gave it a go, and was able to produce what the site called "bad Nintendo knockoffs," which is certainly interesting. Google calls its current Project Genie model, Genie 3, an "experimental research prototype" (a funny name for something it's selling access to for $250 per month as part of its "AI Ultra" subscription) and says it enables users to "create, explore and remix their own interactive worlds." "Unlike explorable experiences in static 3D snapshots, Genie 3 generates the path ahead in real time as you move and interact with the world," Google said in a blog post. "It simulates physics and interactions for dynamic worlds, while its breakthrough consistency enables the simulation of any real-world scenario -- from robotics and modelling animation and fiction, to exploring locations and historical settings." As a recent GDC survey showed, creative workers in the games industry are becoming increasingly hostile to generative AI, and Genie 3 has predictably not landed for everyone as the great benefit to humanity that Google says it's aiming for. "For once, CC: [email protected]," joked developer Rami Ismail about The Verge's Genie-generated Mario 64 and The Legend of Zelda knock-offs. (The Verge said that before it published its article, Genie 3 stopped accepting prompts to recreate Mario 64.) The model does appear to be more advanced than what we've seen before, holding onto continuity in the examples shown (though they are brief clips) and apparently simulating physics reliably, though The Verge quickly found the expected jank, saying that one demo failed to maintain continuity and that the overall result was "much worse than an actual handcrafted video game or interactive experience." Things like that horrid Darren Aronofsky slopumentary make it hard to feel optimistic that all this is just about researchers advancing human interests, and not big tech companies pursuing total cultural domination. I do hope Google has called it "genie" in a moment of self-awareness, implying that it might give us something other than what we wish for, and not just in terms of its response to prompts. But for the sake of a thought experiment, if generative AI tools weren't at all controversial and models like Genie 3 worked perfectly, do you think you'd use them? I'm finding it hard to answer that question myself. As a kid, I of course wished that Star Trek's holodecks were real. But now, facing the possibility that I will in the future be able to type any scenario into my PC and instantly play it out in a custom simulation (though perhaps without Star Trek's corporeal holograms), I struggle to imagine enjoying it. Would I care about the scenario or story knowing that there's no person on the other end intending anything by it? After the novelty wore off, wouldn't I just get bored of asking it to make me new Sherlock Holmes mysteries to solve? I haven't replaced listening to music I like with asking an AI music generator to generate music I like and then listening to that. Why would I do that for games? Maybe I'm being too literal, and the reality is that -- as so many generative AI proponents like to say -- this kind of thing will be used as a tool by human creators to expand what's possible, rather than as the end product. But even then, prompts are tiny compared to what comes back from an AI data center. Will I really accept a creative process that relies so heavily on machine predictions? What do you think?

A Bunch Of Big Video Game Company Stocks Just Tanked For A Very Dumb Reason

Google's reveal of its new AI game world making tool, Project Genie, has seemingly spooked some investors Yesterday, Google revealed its Project Genie AI-generation tool, allowing people to make "interactive environments" in seconds using just prompts. Today, in response to this, a bunch of investors seem to think this is the future of game development and are bailing on big game companies. This has led to stocks tanking for companies like Take-Two and Roblox. On January 29, Google started rolling out early access to a new “experimental research prototype" AI tool named Project Genie. It is powered by Genie 3 and Gemini and allows users to create 3D worlds you can move around in simply by inputting a text prompt, like "Cartoonish 3D racing game with toy cars." As reported by The Verge on Thursday, the tool can also be used to create "games" that look a lot like Mario and Zelda, something I imagine Nintendo won't be happy about. While Genie's creations aren't games at all, just 3D environments that you can explore for a short amount of time, it seems many investors believe that tools like Genie will soon magically be making entire games. There's been a bunch of sudden stock sell-offs across the gaming industry on Friday as a result. As reported by Investing.com, the stock price for numerous publishers and console manufacturers is tanking today after Genie's reveal. As of 1:05 p.m. EST, Grand Theft Auto 6 publisher Take-Two Interactive was down over nine percent. Roblox's stock price had slid nearly 12 percent. Video game engine company Unity's stock is down a whopping 20 percent. And even Nintendo stock is down nearly five percent. These tumbles all happened today, which seems to directly connect the slides to the reveal of Google's new Genie tool. At the moment, the interactive experiences Google's tool can produce last only one minute, run at 24 frames per second, and cap out at 720p. They also lack stability, with one demo featuring a race track changing mid-gameplay. The tool can also be used to create replicas of games like Mario 64, though Google seems nervous about this ability, with the AI tool eventually stopping a Verge reporter from making more Mario "games" due to "the interests of third-party content providers. Meanwhile, other people are already using the tool to make ugly, horrible versions of GTA 6 and Dark Souls. But for the people with all the money, none of this matters. They see a future where game devs and companies aren't needed, and this magic AI tool can save money and quickly produce the next Call of Duty or GTA. Good luck with that.

Unity, Take-Two Shares Sink After Google Unveils AI World-Building Tech 'Project Genie' - Take-Two Interactive (NASDAQ:TTWO)

Google Unveils AI World Generation Google announced Project Genie on Thursday, an experimental research prototype powered by its Genie 3 world model that enables users to create and explore interactive worlds. The technology is now available to Google AI Ultra subscribers in the U.S. According to a blog post by Google DeepMind, Project Genie "lets users create, explore and remix their own interactive worlds" through text prompts and images. How The Technology Works The prototype features three core capabilities: world sketching, world exploration, and world remixing. Unlike static 3D experiences, Genie 3 generates environments in real time as users move and interact. "Project Genie generates the path ahead in real time based on the actions you take," the Google team stated in the announcement. The technology integrates with Nano Banana Pro for world previewing and allows users to define character perspectives ranging from first to third person. Investor Reaction The announcement triggered concerns about potential disruption to traditional game development platforms and publishers. Unity provides software platforms for creating interactive 3D content, while Take-Two develops and publishes major gaming franchises, including Grand Theft Auto and NBA 2K. Price Action Unity Software shares were down 20.93% to $30.66 at the time of publication on Friday. Take-Two Interactive was down 9.49% to $216.70, according to data from Benzinga Pro. Image via Shutterstock This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs

Video game stocks nosedive as Google's 'Project Genie' allows virtual world creation (RBLX:NYSE)

Video game stocks are plummeting in Friday's afternoon trading session after tech giant Google (GOOG) (GOOGL) announced "Project Genie," an experimental research prototype that allows users to create virtual worlds and interact with them. Names like Unity Software (U Video game stocks are plummeting following the announcement of Google's Project Genie, with Unity, AppLovin, Roblox, and Take-Two experiencing the steepest declines. Project Genie could accelerate game development by improving content creation, but there are concerns about consistent player experience, increased marketing expenses, and dependency on high-quality engagement platforms. Unity's CEO sees it as an opportunity, not a risk. Analysts note Unity's collaboration with Google and believe AI tools benefit game creation speed, while Unity's CEO stresses the company's vital role in making AI outputs usable for games, downplaying risk and highlighting positives.

Unity stock falls alongside Take-Two, Roblox after Google's Project Genie launch By Investing.com

Investing.com -- Unity Software (NYSE:U) stock tumbled 12% Friday, while Take-Two Interactive Software (NASDAQ:TTWO) fell 7% and Roblox Corporation (NYSE:RBLX) dropped 8% following Google's announcement of Project Genie, a new AI-powered world creation tool. The gaming and interactive software companies saw their shares decline as Google, a unit of Alphabet (NASDAQ:GOOGL), unveiled its experimental prototype that allows users to create, explore, and remix interactive virtual worlds. The new offering appears to have sparked investor concerns about potential competition for established game development platforms. Project Genie, which is rolling out to Google AI Ultra subscribers in the U.S., leverages the company's Genie 3 world model to generate dynamic, interactive environments in real time. The tool enables users to create customizable worlds through text prompts and images, with features including "World Sketching," exploration capabilities, and remixing options. The prototype represents Google's push into immersive content creation, potentially challenging companies like Unity, which provides tools for game developers, and platforms like Roblox, which offers user-generated gaming experiences. Take-Two, known for franchises like Grand Theft Auto, could also face competitive pressure from simplified content creation tools. Google described Project Genie as part of its broader artificial general intelligence (AGI) mission, noting that the technology simulates physics and interactions for dynamic environments while maintaining consistency across various scenarios. While the company acknowledged several limitations of the current prototype, including imperfect visual rendering and occasional control issues, the technology signals Google's ambitions in the interactive content creation space that has traditionally been dominated by specialized gaming and development platforms.

Google's Project Genie Seemingly Causes Some Investors to Lose Faith in Roblox, Unity and...GTA 6 - IGN

Just one day after the announcement of Genie, Google's generative AI-powered virtual world creator, a number of major video game companies are seeing their stock prices tumble, seemingly because some investors think you can just generate an entire video game with AI now. Of course, that's not what Genie is. Genie essentially lets you create a virtual "world" by offering prompts to describe the environment, a main character, and first or third-person view. Once it's created, you can control the described character and wander around the world you've made. And that's...kind of it? While you can walk around these virtual spaces with your keyboard, critically, there's nothing else you can really do. There are no game mechanics, there's no one to talk to, no goals, no scores or meaningful interactions. Additionally, each generation is limited to just 60 seconds. And while you could maybe argue that this is just the first step on a road to eventually getting AI to generate playable 3D video games, there's no real evidence yet that such a thing is possible, or that the games would be good or even coherent. The Verge, for instance, tried to basically copy Breath of the Wild using Genie, and while they got something that essentially looks identical, that's just it. It's not playable, the "Link" looks kind of frightening actually, and Genie had to copy something that already existed to make this. It didn't come up with this on its own. But that hasn't really stopped a lot of investors from suddenly jumping off the video game train, a conclusion first posed by Investing.com and shared by others, including Bloomberg journalist Jason Schreier. Perhaps the most notable decline is Take-Two Interactive, which reached a six-month low this morning and, while it rallied somewhat by the closing bell, still ended down 8%. Engine maker Unity is in a similar spot, dropping 24% today also to a six-month low. Roblox stock also cratered today by 13% by close today, though notably Roblox has been on a downward trend since November. Still, it's a six-month low for Roblox, too. Not every gaming company is seeing a massive nosedive. Ubisoft is technically down 7% today, but with its stock down to just $1/share, any small movement in either direction will seem significant. The company has been in pretty dire straits for months, even years now, and its announcement of more layoffs, closures, and cancelations earlier this month already had stock even further in a downward spiral. EA stock hasn't changed much today at all, but that's understandable, given EA announced last fall that it was preparing to sell to an investor group headed up by the Saudi Arabian government and will soon exit the public trading market. Meanwhile, Nintendo stock, down just under 5% today at the time this piece was written, has been all over the place all month, following a steady downward trend since November. The pattern I'm seeing here between Take-Two, Roblox, and Unity is a sudden distrust not in games as an idea, but rather concerns about "platforms". Unity is a game engine. People use it to make games. If Genie can also make games, who needs Unity? In Roblox's case, Roblox is a pure user-generated content (UGC) factory - something that would likely become obsolete quickly if Genie took over. And for Take-Two, the publisher is about to release Grand Theft Auto VI later this year (we hope), which would very likely be accompanied at launch or not long after with some new version of GTA Online. While the current GTA Online doesn't rely on UGC, there have been recent suspicions this new version might. Again, the thinking here is seemingly that if people can just make their own little games in Genie, why would they bother doing it in Roblox or GTA or Minecraft or Fortnite or Unreal or anywhere else (Microsoft, for its part is too big to see any stock impact from Genie today and Epic Games is not publicly traded). Is selling shares of major game publishers going to pay off for these investors? I'm not a stock expert, but if nothing else, it doesn't seem to be like a good idea to bet against GTA 6 right now (though Take-Two's earnings are next week, so we'll see I guess). And while Genie doesn't seem up to the task of making a whole video game out of nothing, plenty of other studios are coming out on one side of the fence or the other on using generative AI of any kind in their work. It seems that one way or another, the folks betting big money on generative AI will reap whatever harvest of that investment there is sooner rather than later.

Videogame stocks slide on Google's AI model that turns prompts into playable worlds

Jan 30 (Reuters) - Shares of videogame companies fell sharply in afternoon trading on Friday after Alphabet's Google rolled out its artificial intelligence model capable of creating interactive digital worlds with simple prompts. Shares of "Grand Theft Auto" maker Take-Two Interactive and online gaming platform Roblox were down around 9% each, while videogame engine maker Unity Software dropped 19%. The AI model, dubbed "Project Genie", allows users to simulate a real-world environment through prompts with text or uploaded images, potentially disrupting how video games have been made for over a decade and forcing developers to adapt to the fast-moving technology. "Unlike explorable experiences in static 3D snapshots, Genie 3 generates the path ahead in real time as you move and interact with the world. It simulates physics and interactions for dynamic worlds," Google said in a blog post on Thursday. Traditionally, most videogames are built inside a game engine such as Epic Games' "Unreal Engine" or the "Unity Engine", which handles complex processes like in-game gravity, lighting, sound, and object or character physics. Project Genie also has the potential to shorten lengthy development cycles and reduce costs as some premium titles take around five to seven years and hundreds of millions of dollars to create. Videogame developers have been increasingly adopting artificial intelligence as a way to stand out in a highly competitive industry dominated by large players. A Google study last year showed that nearly 90% of game developers use AI agents. However, the use of AI in videogames is a contentious topic, with many fearing that the technology could lead to a wave of job losses, after the industry went through record layoffs over the past few years as it recovered from a post-pandemic slump. Videogame voice actors and motion-capture performers went on strike in 2024 over concerns that AI is being trained on their voices without consent and compensation. (Reporting by Zaheer Kachwala in Bengaluru; Editing by Vijay Kishore)