Google's Project Genie AI tool triggers massive selloff in video game stocks across the market

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.

Gaming market melts down after Google reveals new AI game design tool -- Project Genie crashes stocks for Roblox, Nintendo, CD Projekt Red, and more

Yesterday, Google announced Project Genie, a new generative AI tool that can apparently create entire games from just prompts. It leverages the Genie 3 and Gemini models to generate a 60-second interactive world rather than a fully playable one. Despite this, many investors were scared out of their wits, imagining this as the future of game development, resulting in a massive stock sell-off that has sent the share prices of various video game companies plummeting. The firms affected by this include Rockstar owner Take-Two Interactive, developer/distributors like CD Projekt Red and Nintendo, along with even Roblox -- that one actually makes sense. Most of the games you find on the platform, including the infamous "Steal a Brainrot," are not too far from AI slop, so it's poetic that the product of a neural network is what hurt its stock. Unity's share price fell the most at 20%, since it's a popular game engine. Generally speaking, that's how most games operate: they use a software framework, such as Unity or Unreal Engine, which provides basic functionality like physics, rendering, input, and sound. Studios then build their vision on top of these, and some developers even have their own custom in-house solutions, such as Rockstar's RAGE or Guerrilla's Decima. Project Genie evades all that and handles these building blocks itself, but remember that it doesn't actually build games, per se. When you ask it to make a clone of Super Mario 64, it will dupe it rather impressively, but all you get is basic movement with a free camera that can look around the map. There are no objectives, and the AI often forgets what it has already generated when filling in gaps. Roads in these questionably-generated games would often have patches of grass in between, as if the model thought it was supposed to generate something else for a bit before swiftly recovering. This hallucinating behavior signifies the prototype nature of the tech, and Google has said Project Genie is an experimental tool for now, meant to help with things like previz for large games. That ties into the issue with game development these days: how bloated some productions can get with insane budgets and lead times, yet still somehow end up delivering an underwhelming product. Tools like Project Genie could genuinely help here, saving developers time they'd otherwise spend in the early stages of the game, before level design is locked in. But in that way, AI is the solution to an artificial problem that should've been solved without it; for all that matters, devs could still find a way to balloon productions out of control even with Project Genie and a hundred other generative AI models at the helm. Of course, instead of having that concern, investors are clearly more hopeful for an AI-assisted future, given the resulting stock market shenanigans.

AI Fears Behind Gaming Selloff Are Overblown, mBank Says

The largest developers with strong franchises and "immersive" storytelling are unlikely to be "much at risk" from AI tools, according to mBank analyst Piotr Poniatowski. The recent selloff in video-game developer stocks -- tied to fears of disruption from Google's Project Genie AI tool -- is "unjustified," mBank SA analysts said. Shares of Unity Software Inc., Roblox Corp. and CD Projekt SA plunged on Friday after Google unveiled its AI prototype for generating virtual 3D worlds, on concerns it could threaten existing game developers. Unity and Roblox rebounded in premarket trading Monday, while CD Projekt fell in Warsaw for a third-straight session. mBank said the selloff overlooked the Google tool's current limitations, adding that the technology will ultimately benefit larger studios. "Given the current usability of Project Genie, we regard Friday's selloff in game-developer stocks as an unjustified overreaction," mBank analyst Piotr Poniatowski said. "Counterintuitively, we believe AAA game developers will benefit most from such tools," he added, referring to bigger studios. The prototype Genie web app allows users to generate their own playable worlds by typing in text prompts or uploading images. It allows the creation of characters who can travel through various environments, albeit while currently only offering limited playing times and experiences. For mBank's Poniatowski, Genie's promotional videos suggest that AI tools could eventually lead to a surge in new games and solo projects, intensifying competition among smaller studios. The largest developers with strong franchises and "immersive" storytelling, are unlikely to be "much at risk," he noted. "If we look from a pure game creation perspective, we don't see AAA studios losing their value proposition," noted Wedbush analyst Alicia Reese. "Existing platforms remain well-positioned to compete." Still, concerns around AI continued to weigh on European gaming stocks on Monday. CD Projekt fell a further 1%, while Ubisoft Entertainment SA declined 2.9%.

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

Take-Two CEO says the company is embracing generative AI, but promises it has "zero part" in GTA 6

Serving tech enthusiasts for over 25 years. TechSpot means tech analysis and advice you can trust. A hot potato: Take-Two Interactive CEO Strauss Zelnick has made a concerning announcement: the GTA maker is "actively embracing generative AI." But, obviously aware of any potential backlash from fans, he emphasized that generative AI has "zero part" in GTA 6. Zelnick was responding to a question about Google's Project Genie AI tool. Announced last week, the experimental system transforms simple text instructions into short, explorable video environments - interactive worlds, essentially. Google's announcement of Project Genie caused Take-Two's stock price to fall to an 11-month low, a reaction that Zelnick said left him "a little confused." "The video game business, since its inception, was built on the back of machine learning and artificial intelligence," he explained. "We create our games in computers with technology and, ever since questions began about generative AI about months ago, I've been incredibly enthusiastic about what the future can bring." Zelnick added that Take-Two is currently actively embracing generative AI with hundreds of pilots testing its implementation across the company, including within its studios. The CEO then rolled out the line we hear so often from executives - that AI will reduce the time spent on mundane tasks to drive efficiencies and reduce costs. It seems Zelnick hasn't read the two recent reports showing the majority of companies are seeing no financial benefits from introducing AI systems. "That said, do I think [AI] tools by themselves create great entertainment properties? No, there's no evidence that that's the case and it won't be the case in the future," Zelnick continued. He added that "specifically with regards to GTA 6, generative AI has zero part in what Rockstar Games is building." Zelnick said Rockstar Games' worlds are handcrafted, built from the ground up, building by building, street by street, neighborhood by neighborhood. The CEO pledged that these environments are not procedurally generated - and they shouldn't be. GTA 6 will almost certainly become a global success when it arrives in November, but any use of generative AI could have potentially impacted sales. There was a slew of anger against Black Ops 7, Anno 117, Arc Raiders, and others over the games' use of the technology. Baldur's Gate 3 studio Larian recently had to confirm that AI assets wouldn't appear in the next Divinity game that was unveiled at the Game Awards last year. The announcement followed a Bloomberg report that Larian had been pushing hard on generative AI, which employees denied. Last month, Jack Buser, global director for games at Google Cloud, said that generative AI was the "Iron Man suit" of game development, in that it allows people to do things they previously couldn't. A few days later, a survey found that over 50% of game developers say generative AI is harming the industry, the highest level to date.

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."

GTA 6 owner Take-Two is 'embracing generative AI' as part of its goal to be the 'most efficient company in the entertainment business' says CEO

Take-Two Interactive CEO Strauss Zelnick has discussed the potential of generative AI technology in the company's latest earnings call. In response to a question about the recent bruising that Take-Two stock received following the announcement of Google's Project Genie AI tool, which purportedly allows users to generate playable interactive worlds based on prompts, Zelnick admitted that he was "a little confused" by the market's reaction. "The video game business, since its inception, was built on the back of machine learning and artificial intelligence," he explained. "We create our games in computers with technology and, ever since questions began about generative AI about months ago, I've been incredibly enthusiastic about what the future can bring." He went on to reveal that Take-Two is currently "actively embracing generative AI" with "hundreds of pilots" testing its implementation across the company including in its game studios. He added that the company has the chance "to drive efficiencies, reduce costs, and create the opportunity to do what digital technology has always allowed" by reducing the time spent on "mundane tasks" and freeing up time for "the more interesting tasks of making superb entertainment." It comes as part of Take-Two's overall strategy to "be the most creative, be the most innovative, and be the most efficient company in the entertainment business." Although you can hardly move for massive tech companies making announcements regarding generative AI, use of the technology remains controversial in the gaming space. Fans were disappointed to see apparent "AI slop" adorning the side of a building in a recent Forza Horizon 6 trailer, and Battlefield 6 players expressed fury at the sale of seemingly AI generated content in the game's virtual store late last year. Thankfully, Zelnick has confirmed that generative AI will not be used in the development of the highly anticipated Grand Theft Auto 6. Speaking to Gamesindustry.biz ahead of the earnings call, he confirmed that: "Generative AI has zero part in what Rockstar Games is building." "Their worlds are handcrafted. That's what differentiates them," he explained. "They're built from the ground up, building by building, street by street, neighborhood by neighborhood. They're not procedurally generated, they shouldn't be. That's what makes great entertainment." The earnings call also reaffirmed that GTA 6 is still on track to launch on November 19, 2026 with marketing efforts expected to ramp up soon.

Take-Two promises Gen AI has "zero part" in Rockstar's GTA 6

Rockstar's highly-anticipated Grand Theft Auto 6 will not feature any Generative AI. That's coming from Take-Two head Strauss Zelnick, who assured the GTA community that the controversial tech has "zero part in what Rockstar is building". Zelnick was talking with Eurogamer's sister site gamesindustry.biz ahead of Take-Two's Q3 financial results, when the topic of AI came up. The company head said he has "been enthusiastic" about AI from the beginning, and Take-Two's "products have always been built with machine learning and artificial intelligence". Zelnick called Take-Two a "leader in the space", with the company currently having "hundreds of pilots and implementations" across the board, and that includes "within our studios". He added the company has seen instances where generative AI tools are "driving costs and time efficiencies", though he does not believe these tools in isolation can "create great entertainment properties". This is when the conversation turned to Rockstar and GTA 6, which is expected to debut on 19th November (a date Zelnick remains confident about). "Specifically with regards to GTA 6, Generative AI has zero part in what Rockstar Games is building," Zelnick said, adding the studio's "worlds are handcrafted" and that is what sets it apart from other studios. "They're built from the ground up, building by building, street by street, neighbourhood by neighbourhood. They're not procedurally generated, they shouldn't be," Zelnick stated. "That's what makes great entertainment." Zelnick's words come soon after Take-Two saw its stock price plunge to an 11-month-low after Google rolled out Project Genie 3, an AI tool which allows users to generate virtual worlds in 60-second bursts from text prompts. As Vikki reported at the weekend, several companies in addition to Take-Two - including CD Projekt, Unity and Roblox - saw between 8-20 percent wiped off the value of their companies as spooked investors seemingly went into the weekend thinking tech like this could replace the game development process.

'We're actively embracing generative AI,' Take-Two boss says, after previously expressing skepticism: 'We have hundreds of pilots and implementations across our company'

CEO Strauss Zelnick says generative AI remains a tool for enabling creators to do bigger and better things, but it sounds like a shift away from past comments. There was a spot of consternation over Google's new AI-powered world builder Project Genie earlier this week: In the immediate wake of the software's announcement, the share prices of a handful of companies, including game engine maker Unity and Grand Theft Auto 6 publisher Take-Two Interactive, took a notable tumble. During today's investors call following its Q3 financial report, however, Take-Two CEO Strauss Zelnick said he's not sweating it, and he's a little confused about why anyone else is. "The videogame business, since its inception, was built on the back of machine learning and artificial intelligence," Zelnick said during today's call. "We create our games in computers, with technology, and ever since questions began about generative AI about 18 months ago, I've been incredibly enthusiastic about what the future can bring. "As it happens now, we're actively embracing generative AI. We have hundreds of pilots and implementations across our company, including with our studios, and we are seeing opportunities to drive efficiencies, reduce costs, and create the opportunity to do what digital technology has always allowed, which is, mundane tasks become easier and less relevant, which frees up our creators to do the more interesting tasks of making superb entertainment." It's not clear exactly what Zelnick means that the videogame business was built on machine learning since its inception -- machine learning has been a research subject for a long time but I don't think anyone considers neural networks to be the foundation of game development -- but his point seems to be that videogames have always chased the cutting edge of computing tech. He also expressed hope that, as generative AI grows increasingly useful as a tool to promote innovation and efficiency in the development process, it will eventually do the same on the creative front, "as it allows our creators to use digital tools to expand what we do, to make it even more beautiful, and even more engaging, and even more exciting." Zelnick has previously been a relative skeptic about the capabilities of AI. He's equated generative AI to extant digital tools in the past, and has been vocal about what he perceives are its limitations: In October 2025, for instance, he said AI seems so extraordinary now because it's "a combination of metadata with a parlor trick," and prior to that he declared that he's not worried about AI creating hit videogames "because it's built on data that already exists. It's backward-looking. Big hits are forward-looking and therefore need to be created out of thin air." He also pointed out in February 2025 that, very simply, "there's no such thing" as artificial intelligence. There's still an aspect of that doubt in the way Zelnick leans into 'AI as a creator's tool' in these most recent comments, rather than, say, predicting a future where billions of people are vibe-coding games, or... whatever. But the explicit suggestion that generative AI can fundamentally improve the work of human artists and game developers, rather than simply making flowcharts less messy, lands as notably more enthusiastic about the technology than I've seen in the past. Later in the call, Take-Two president Karl Slatoff echoed Zelnick's comments, saying Project Genie "is very exciting technology" but that the core question is how it can benefit game developers. "It certainly doesn't replace the creative process, and I would say, it looks to me more like procedurally generated interactive video at this point," Slatoff said. "There are limitations, and Google has said as much." "There are so many more elements to game development that go beyond, quote, 'world creation' ... Even beyond world creation, there's everything else that's involved. There's the storyline, there's emotional connection, there's vibe, there's mission structure -- all of those things, you cannot capture through AI, and certainly not through a world builder. So that's just a very, very small component of what we do, and if this tool bears out, it will make a component of what we do all that much better and more efficient." If nothing else, it will make the release of Grand Theft Auto 6 a little more interesting for AI detectives. That, by the way, is still slated to happen on November 19 on consoles, and not slated to happen at all (yet, but it will be, just be patient) on PC.

Google's new AI 'world model' is already hitting the games industry, but it's everything I hate about artificial intelligence

Investors placing stock in Project Genie is a concerning sign for potential AI game development AI continues to be a constant threat to gaming, with its heavy impact on gaming PC hardware via high RAM prices, and concerns of replacing game developers, and a recent update shows that the latter may eventually become a possibility. According to Google, multiple video game developers and publishers have seen major stock price plummets as a result of Project Genie's release. It's a new AI tool from Google that allows users to generate playable interactive worlds based on prompts or images. As you might have guessed, this has led to multiple users creating worlds using images of popular games like Nintendo's The Legend of Zelda: Tears of the Kingdom, Rockstar Games' GTA 5, and Kingdom Hearts, some of which look close to the genuine products in some areas. Analysts have noted that the reason for stock price drops for companies like CD Projekt Red, Take Two Interactive (Rockstar Games' parent company), and Nintendo is that investors have quite clearly put a lot of stock into Project Genie, likely with the idea that this would overthrow genuine creations from big game studios. However, Project Genie is still in its experimental phase, which means these interactive worlds are barely playable, and it comes at a hefty cost for users at $249.99 per month via Google's AI Ultra plan. It's not even close to being advanced enough to outdo authentic games, and the consensus surrounding AI integration in gaming (such as the backlash to AI in Call of Duty Black Ops 7) indicates that gamers won't stand for AI-generated gaming. However, there's still a chance this will become a reality in the future. While AI certainly has its benefits, namely Nvidia's DLSS upscaling technology, AI is very quickly proving to be detrimental to gaming. PC hardware manufacturers are turning their attention to AI enterprises, which is part of why RAM prices are so high, and now, investors have just given us our first glimpse at what will happen if a competent AI tool for gaming is launched - and it's scary. Game development from real developers has yielded some of the best content in games that the entertainment industry has ever seen, and if an AI tool like Project Genie ever becomes advanced enough to potentially challenge authentic games, we could be staring down the barrel of a loss in creativity, gaming lacking identity, and most importantly, more layoffs. It's a promising sign to see that gamers are protesting against such measures vehemently, as I strongly believe that AI should not be used for games in this manner. Let's just hope it never gets to that point.

Take-Two CEO makes it clear that 'generative AI has zero part' in GTA 6

TL;DR: Take-Two CEO Strauss Zelnick confirmed that Grand Theft Auto 6 has not used generative AI in its development at all, emphasizing the game's handcrafted world design, and that this is what differentiates GTA 6. Procedural generation is not involved, and shouldn't be, Zelnick said, observing: "That's what makes great entertainment." The CEO of Take-Two has clarified that Grand Theft Auto 6 won't use generative AI for any of its development. Strauss Zelnick, Chairman and Chief Executive Officer of Take-Two (Image Credit: Take-Two) Chief executive Strauss Zelnick was talking a lot about AI in an interview with Gamesindustry.biz (via Eurogamer), where he enthused about Take-Two being a 'leader in the space'. Zelnick said: "This company's products have always been built with machine learning and artificial intelligence. We've actually always been a leader in the space, and right now we have hundreds of pilots and implementations across our company, including within our studios. And we're already seeing instances where generative AI tools are driving costs and time efficiencies." However, in case anyone is immediately going to leap to conclusions about AI poking its nose into the code, or design, of GTA 6, Zelnick makes it clear that this certainly isn't the case. The CEO noted: "Specifically with regards to GTA 6, Generative AI has zero part in what Rockstar Games is building. Their worlds are handcrafted. That's what differentiates them. They're built from the ground up, building by building, street by street, neighborhood by neighborhood. They're not procedurally generated, they shouldn't be. That's what makes great entertainment." Zelnick was speaking before Take-Two's Q3 fiscal results, following a drop in the share price of multiple major gaming outfits, Take-Two included, after Google showed off Project Genie and its AI-generated 3D worlds. It's not the first time Zelnick has talked about AI in relation to Rockstar's heavyweight franchise, and indeed he was skeptical regarding the potential role of AI in a future Grand Theft Auto 7 in an interview back in October 2025. GTA 6 is still on course for its November 19 release date this year (after notable delays), and Zelnick said that he remains confident in that launch timeframe.

Game companies see share prices plummet following the launch of Google's very limited virtual world generator, Project Genie

Gaming companies saw share prices plummet this week after Google rolled out Project Genie 3, an AI tool that lets users generate virtual worlds in 60-second bursts from text prompts. Companies like Take-Two, CD Projekt, Unity, and even Roblox saw between 8-20 percent wiped off the value of their companies as spooked investors seemingly went into the weekend thinking tech like this could replace the game development process. Which it can't, of course (not yet, anyway). As Bloomberg's Jason Schreier wrote on BlueSky, "Gaming stocks are dropping today after Google's rollout of Project Genie, an AI tool that lets users create and explore virtual worlds for 60 seconds. This is the result of a market that does not understand how video games are made. "To be clear, this is not a referendum on the quality of AI content," he added. "Markets are spooked because they believe tools like Project Genie will allow anyone to generate a video game. This is not actually possible." He then suggested traders take a look at his latest book, Blood, Sweat, and Pixels. Video game stocks are suddenly crashing today with the launch of Google's Project Genie as investors think games will start magically getting made with AI ➡️ ca.investing.com/news/stock-m... #GoogleGemini #TakeTwo #CDProjektRED #Roblox #videogames [image or embed] -- Shinobi602 ( @shinobi602.bsky.social) January 30, 2026 at 5:23 PM Shinobi602 added a similar sentiment: "Video game stocks are suddenly crashing today with the launch of Google's Project Genie as investors think games will start magically getting made with AI." Genie 3 is described as a general-purpose world model that can take text descriptions and generate "photorealistic environments that can be explored in real-time". The environments are interactive and controllable, and offer "world consistency and stability". This includes both real-life and fantastical scenarios rendered in realistic 3D or animated styles. And it does look incredible. The examples given - which include the prompts used to generate them - are undoubtedly impressive, most of which respond to external third-party controls or inputs. But the tech comes with several limitations, not least that its interactive elements are significantly restricted, and creations are only a minute long. It would be extraordinarily unwise to suggest that Genie couldn't challenge game engines like Unity and Unreal one day, but given the incredibly limited examples provided, it's unlikely to do so anytime soon. AI, of course, continues to generate heated debate across the industry. In 2024, a report by Unity claimed 62 percent of studios using its tools used AI at some point during game development, most notably in animation. A GDC survey from that same year, meanwhile, said that around a third of industry workers reported using AI tools already. That number is now likely to be higher, and a more recent Tokyo Games Show survey reported over half of Japanese game companies are using AI in development.

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.

GTA 6 Will Not Have Any Generative AI Content, Take-Two Boss Confirms

* GTA 6's launch marketing campaign will begin this summer * Take-Two reported its third-quarter FY 2026 earnings this week * Rockstar Games has twice delayed GTA 6 Grand Theft Auto 6, Rockstar Games' long-awaited follow-up to GTA 5, is set for launch in November. Rockstar parent Take-Two reaffirmed its launch plans this week and said that the game's marketing campaign will begin this summer. Take-Two CEO Strauss Zelnick has now also confirmed that GTA 6 will not feature any generative AI. In an interview with GamesIndustry.biz ahead of Take-Two's third-quarter FY 2026 earnings call, Zelnick talked about the company's policy on AI use. The Take-Two boss stressed that Take-Two and its subsidiaries made use of AI in productivity tools rather than creative output. Zelnick said that instead of looking at AI as a threat, he had been "enthusiastic" about the technology right from the start. "This company's products have always been built with machine learning and artificial intelligence. We've actually always been a leader in the space, and right now we have hundreds of pilots and implementations across our company, including within our studios. And we're already seeing instances where generative AI tools are driving costs and time efficiencies," the executive said. GTA 6 'Handcrafted' by Rockstar Zelnick, however, pointed out that generative AI would never replace human creativity and confirmed that everything in Grand Theft Auto 6 was handcrafted by Rockstar developers. "That said, do I think tools by themselves create great entertainment properties? No, there's no evidence that that's the case and it won't be the case in the future. Specifically with regards to GTA 6, Generative AI has zero part in what Rockstar Games is building. "Their worlds are handcrafted. That's what differentiates them. They're built from the ground up, building by building, street by street, neighborhood by neighborhood. They're not procedurally generated, they shouldn't be. That's what makes great entertainment." This is not the first time that Zelnick has commented on AI and its capabilities in game development. Back in October last year, the Take-Two CEO said the impact of AI on game development was "limited" as AI models lacked "creativity". "Let's say there were no constraints [on AI]. Could we push a button tomorrow and create an equivalent to the 'Grand Theft Auto' marketing plan?" Zelnick said in an interview at the time. "The answer is no. A, you can't do that yet, and B, I am of the view that you wouldn't end up with anything very good. You end up with something pretty derivative." AI in Game Development Despite the scepticism around generative AI in game development, several companies have admitted to using the technology to speed up development times and cut down costs. Even though the use of generative AI in creating game assets, concept art, text, or other in-game content is frowned upon, studios like Baldur's Gate 3 maker Larian and Arc Raiders developer Embark have admitted to using AI tools in their processes. In December, Larian received backlash from gamers after confirming it used AI in its game development processes, including concept art. Later, the studio backtracked and said it won't use any GenAI art in its next game, Divinity. Larion CEO Swen Vincke, however, confirmed that the studio would continue to use AI to help "refine ideas faster" and deliver a "higher-quality game". Earlier this week, Take-Two reported its earnings for the third quarter of FY 2026 and reaffirmed the November 19, 2026, launch date for GTA 6. During the earnings call, Zelnick announced that the launch marketing push for GTA 6 would begin "this summer". He also denied a rumour that said that Take-Two was planning to hold off GTA 6's physical release to avoid early leaks. Grand Theft Auto 6 is confirmed to launch on PS5 and Xbox Series S/X on November 19.

GTA 6 publisher Take-Two responds to the Google AI that sent game industry stocks crashing: Project Genie is "not even in the same ballpark" as a real game engine

Last week, Google gave its AI Ultra subscribers access to Project Genie, a tool that lets users generate and explore AI-generated worlds. Game stocks quickly cratered after the news, affecting even GTA 6 publisher Take-Two. The company's president does see value in Google's tech but is keen to remind investors that it's no replacement for a real game engine. "Trying to make a comparison to a game engine is just, really - they're not even in the same ballpark," Take-Two president Karl Slatoff said in a financial call yesterday attended by GamesRadar+. "Genie is not a game engine." If you, a person who's probably played at least one video game before, take a look at Project Genie in its current form, it'll be readily apparent that it's still quite some distance from an actual, complete game. It's light years beyond many previous interactive AI experiences, like the nightmarish Quake 2 demo Microsoft put out last year, but its generated worlds are no replacement from those crafted by actual developers. Still, "it's very exciting technology," Slatoff said. "The question is, how can it benefit our creators? I think there will be a moment in time where that will become more defined. It certainly doesn't replace the creative process." Slatoff acknowledges that "there are limitations, and Google has said as much," especially since it's currently focused on world generation in particular, which is only one part of making a game. "Even beyond world creation, there's everything else that's involved," Slatoff said. "There's the storyline, there's emotional connection, there's vibe, there's mission structure. All of those things you cannot capture through AI, and certainly not through a world builder. That's just a very, very small component of what we do. And if this tool bears out, it will make a component of what we do all that much better and more efficient." All those truths are obvious to anyone who's picked up a controller before, but apparently not to a wide swathe of investors. As financial site Seeking Alpha reported last week, the Genie reveal caused some massive stock drops in the game industry, with game engine maker Unity dropping 21.6%, Roblox dropping 12.3%, and Take-Two dropping 9%. But some financial analysts are urging caution, suggesting that these sorts of AI tools are not going to replace actual game publishers. In fact, the expectation seems to be that they'll simply make development more efficient. At least, that's the idea Take-Two CEO Strauss Zelnick is presenting. "We're already seeing instances where generative AI tools are driving costs and time efficiencies," Zelnick said in a recent interview, but it's not a magic bullet - after all, with GTA 6 on the horizon, he still says "generative AI has zero part in what Rockstar Games is building."

Gaming stocks tumble after Google shows Project Genie's real-time AI-generated 3D worlds

TL;DR: Project Genie, Google's experimental AI prototype, enables users to create and explore interactive worlds with realistic physics in real time. Though limited by resolution, frame rate, and duration, it signals a major advancement in AI-generated gaming, impacting major game developers' stocks and already offering promising potential for early-stage game design. Project Genie, from Google, is a new experimental research prototype available to Google AI Ultra subscribers in the U.S. Although it's only a couple of days old, Project Genie has been making waves across social media because it leverages AI to create fully interactive worlds and environments with realistic physics that you can freely explore. Project Genie combines Google's general-purpose world model, Genie 3, with Nano Banana Pro and Gemini, allowing users to sketch and shape worlds before jumping in to explore them. And with that, many consider it a significant milestone for AI and a step toward generating video games that you can play in real time from a simple text prompt. At a glance, it's groundbreaking and feels like a glimpse of a future of AI-generated games, but the resolution is limited to 720p, the frame rate is 24 FPS, and the input latency is anything but responsive or smooth. Plus, you've only got 60 seconds. That said, after Google announced Project Genie on Jan 29, 2026, its impact reached the stock market, causing several notable game-related stocks for companies creating engines and handcrafted open worlds to crash. The list includes Rockstar and Grand Theft Auto developer Take-Two Interactive, Roblox, CD Projekt Red, Nintendo, and Unity. The latter saw the largest drop, with Unity's share price falling by almost 20% in response to Project Genie. The reason for these stock prices dropping after the announcement can be chalked up to two things. The fact that Google's new AI tool can generate playable worlds and even games (albeit crude representations of modern-day video games) in real time, while modern AAA-style games are taking longer to develop with larger teams than ever before and increasingly inflated budgets. Naturally, the word 'prototype' is key with Project Genie, as the creations are limited to movement and brief exploration, with the model having trouble remembering what goes where and failing when it comes to adding game mechanics like objectives. Basically, you're free to explore, and on that note, the detail, physics, and ability of Genie to recreate everything from an underwater scene to a snowy mountain top to even a short snippet that looks a lot like The Legend of Zelda: Breath of the Wild is impressive. As a tool for game developers, there's no doubt that it would be beneficial for prototyping and visualizing concepts and art in the earlier stages of a game's development, but as it stands, it's still a long way off from being able to create something like Cyberpunk 2077 or Grand Theft Auto 6.

Videogame stocks slide on Google's AI model that turns prompts into playable worlds - The Economic Times

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.

Rockstar used AI for "zero part" of Grand Theft Auto VI, says Take-Two CEO

Fearful fans believed there might have been another delay looming in Take-Two's recent financial report. However, the GTA developer's parent company actually sounded quite confident, telling us that marketing will begin this summer, and that there is serious belief the November release date will be hit. Speaking to Gamesindustry.biz, Take-Two CEO Strauss Zelnick also confirmed a new detail surrounding the development of the game, saying that generative AI has had no impact on what Rockstar is cooking. "On the topic of AI, I've been enthusiastic since the very beginning," he began. "This company's products have always been built with machine learning and artificial intelligence. We've actually always been a leader in the space, and right now we have hundreds of pilots and implementations across our company, including within our studios. And we're already seeing instances where generative AI tools are driving costs and time efficiencies." "That said, do I think tools by themselves create great entertainment properties? No, there's no evidence that that's the case and it won't be the case in the future. Specifically with regards to GTA 6, Generative AI has zero part in what Rockstar Games is building. Their worlds are handcrafted. That's what differentiates them. They're built from the ground up, building by building, street by street, neighbourhood by neighbourhood. They're not procedurally generated, they shouldn't be. That's what makes great entertainment," Zelnick continued. For people wanting Grand Theft Auto VI but perhaps worried that generative AI has crept its way into the game, this is a moment of relief. AI has been in gaming for a while, but we've always considered it how enemies learn to adapt to our movements, and things like that. To see AI-generated environments, art, and more in our games is something not many of us are wanting.

Google's Project Genie Shows "Meaningful Progress in Content Generation," But it "Can't Replace Creative Vision," Says Analyst

Last week, Google debuted its latest generative AI experiment, Project Genie. It's a tool capable of generating interactive three-dimensional environments made entirely through generative AI that you can explore for one solid minute. All you need to do (after paying the $250 monthly fee for Google's AI Ultra subscription) is write a prompt to start generating your own game-like worlds, but besides the paywall barrier, there are more than a few limitations to this technology in terms of it becoming the new way to make games. The fact that it runs at a slide-show speed of 24 frames per second, the fact that you can barely interact with anything in the environment, that the worlds it generates are devoid of any kind of level design, or anything to really do in them, all come to mind before getting to the fact that these worlds only live for one minute at a time. Still, that didn't stop stock market investors from panicking, causing the shares of major video game industry companies like Take-Two, Roblox, and Unity to take a nosedive, as if investors suddenly believed the age of game development as we've known it was over, and Project Genie was here to usher in a new age. Obviously, that won't happen, and even if it does, as SuperJoost Playlist author and co-founder of SuperData Research, Joost van Dreunen puts it, "World models like Genie represent meaningful progress in content generation. But they can't replace the creative vision, narrative depth, and intangible elements that make games memorable." Dreunen, co-founder of one of the foremost video game industry analytics firms, before selling it to NielsonIQ, offered his take on Project Genie after it was revealed and so significantly impacted the stock market for a day. The top-level takeaway is the aforementioned obvious, that GenAI models like Genie cannot do the job of top-tier game developers. "Creating compelling game worlds is harder than it seems," Dreunen writes, "much like how AI can't simply prompt its way to the next great American novel." Even as the technology improves over time, as these GenAI models certainly will, so long as major players like Google and OpenAI continue to invest in them, Dreunen argues that people won't want to play the games they generate, because people want to experience what expert artists and creatives can do - not what a piece of software that's only iterating on the actual creativity of humans can do. There's also the fact that, currently, players and game developers have made it clear that they have no serious love for GenAI tech and games made with GenAI. Dreunen cites the downfall of InZoi, but you need only look at the backlash Larian Studios faced after it even flirted with the idea of using GenAI for concept art to see how players feel about the technology. The only hope that GenAI world models like Project Genie and future iterations that will come after it have, if they have any hope at all, is potentially one day making something that people actually want to experience. Even then, it won't come without actual human input, with creatives using technology like Genie as a tool, if these technologies ever do find a place in game development.

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

Analysts Downplay Google AI Threat to Video Gaming | PYMNTS.com

By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions. However, analysts said the experimental tool doesn't pose a near-term threat to established studios, per the report. Project Genie is an AI prototype developed by Google that allows users to generate interactive virtual 3D worlds by entering text prompts or uploading images. The system can create environments, characters and basic interactions, producing short playable experiences that demonstrate how AI could automate elements of world-building and game design. The release sent several gaming stocks, including Roblox, plummeting Friday (Jan. 30), the Bloomberg report said. Some of the stocks were rebounding Monday. Analysts at mBank said that while the technology is eye-catching, its current capabilities are limited, according to the report. The prototype supports only brief gameplay sessions and lacks the depth, narrative structure and systems complexity required for full-scale commercial titles. As a result, fears that tools like Genie could quickly disrupt the gaming industry are misplaced. Piotr Poniatowski, an analyst at mBank, said Project Genie should be viewed as an early demonstration rather than a finished product, per the report. Large studios with strong franchises and immersive storytelling are unlikely to be affected by AI tools at this stage, as their value lies in creative direction, production scale and long-term engagement rather than raw asset generation. Instead, Poniatowski said that by lowering barriers to experimentation, generative AI could enable more solo developers and small teams to produce playable content, potentially increasing the number of games entering the market, according to the report. That shift could intensify competition among smaller creators without undermining the role of major studios. Other analysts see AI as a complement to existing development pipelines, the report said. Wedbush analyst Alicia Reese said established platforms and studios remain well-positioned as generative tools evolve, suggesting that AI will be absorbed into workflows for prototyping, testing and asset creation rather than replacing traditional game development altogether. Project Genie reflects a broader trend in AI research toward systems that move beyond static content generation into interactive, real-time experiences. While Google has not indicated when or whether the prototype will become a commercial product, the tool has amplified questions about how quickly generative AI can transition from experimental demos to production-ready systems.

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.

Gaming company stocks crash thanks to Google's new AI experiment Project Genie

As the race to render every artistic creation into a AI-based equivalent of the grey slop-filled Krabby Patty alternative from SpongeBob continues, we're starting to see serious, real-world consequences from AI-based experiments. Recently, it appears Project Genie - Google's AI experiment which can create limited three-dimensional environments that can be explored like a game - has made quite the impression on a lot of company investors. Specifically, as caught by Wccftech, multiple huge gaming companies have seen their share prices plummet thanks to a selling panic caused by Project Genie. Unity Technologies, the maker of the Unity Engine, saw an 18.8% drop. Take-Two Interactive lost ~10%, CD Projekt Red fell by 8%, even the titanic Roblox had a fall, dropping by 13%. Capcom, Tencent, and other companies that make up some of Asia's biggest game creators were mostly unaffected, showing that perhaps this panic is more of a Western trend. It definitely feels like a lot of Twitter/X users have drank the Kool-Aid of this being the end of traditional gaming developers, but there's at least 30 AI-ridden slop posts telling me Hollywood is dead on my algorithm each day, so I'll believe it when I see it. Project Genie is currently an early stage concept, and while it can generate 3D environments from prompts alone, we'll have to see if it can actually make something worth playing as it continues to grow and develop.

Google's Project Genie Experiment Causes Video Game Stocks to Suddenly Crash as Investors Believe Games Will Be Made Solely with AI

Google's latest AI-based experiment, Project Genie, has made a massive impression on users and investors alike. Google calls it a 'general purpose model' capable of swiftly creating photorealistic three-dimensional environments that can then be explored in a game-like fashion. Anyone can test it out simply by writing a prompt. Of course, interaction is extremely limited: you can only move around and jump in these environments. Still, it is very impressive, to the point that it caused the stocks of many video game companies to crash as investors suddenly believed games would soon be made entirely with AI. Unity Technologies, the maker of the Unity Engine (one of the most used third-party game-making tools alongside Epic's Unreal Engine), went down by 18,80% yesterday. Epic Games is a private company, so it wasn't affected for obvious reasons. Game developers and publishers also took a big hit. Take-Two Interactive, the label behind Grand Theft Auto, Red Dead Redemption, Borderlands, and NBA 2K, lost nearly 10%. CD Projekt RED, the Polish developer behind The Witcher series and Cyberpunk 2077, fell by 8%. But Roblox Corporation had a sharper fall than both, losing over 13%. Asian companies like CAPCOM or Tencent were barely affected, probably because the craze happened when their markets were already about to close on Friday. Still, this feels like a vast overreaction: Project Genie is just a glimpse into the future, rather than something anywhere near ready to replace properly made videogames. Even so, Project Genie handles the rendering. Everything else would have to be added in by developers. That is, more or less, the vision shared a couple of years ago by NVIDIA's VP of Applied Deep Learning Research, Bryan Catanzaro. Back then, the man behind DLSS imagined that DLSS "10" could render a game's entire visuals using AI-powered neural rendering, interfacing with a game engine to make it feel like an actual game. We might be heading toward that future, but there's no need for developers to fret - we'll still need them, that's for sure. Then there's the other side of this kind of AI: how do you stop copyright infringement? People have already recreated virtual worlds inspired by SEGA's Sonic and Nintendo's The Legend of Zelda with Project Genie. Of course, this would never fly outside of an experiment. If such technology were ever to be properly released, Google would need to implement strong guardrails to prevent the AI from directly infringing on copyrighted materials. Still, users would likely be able to create similar worlds while straying just far enough that the guardrails do not trigger. What do you think about Project Genie? Did you give it a try yet? Let us know in the comments section.

Google's New AI Tool Draws Scrutiny From the Gaming Industry | PYMNTS.com

Genie 3 drew widespread attention after a series of short clips circulated online, showing what appeared to be playable versions of popular franchises such as Fortnite, Dark Souls, and Grand Theft Auto. But industry insiders argue that these demonstrations are misleading. The videos, typically only 30 to 60 seconds long, are not full games but rather brief, AI-generated sequences that mimic the look and feel of well-known titles, per Forbes. One of the most widely shared examples was a Fortnite-style clip created by Genie 3. Observers quickly noticed that the AI appeared to be building the scene from a single static image taken from a PC Gamer article and then extrapolating movement and gameplay from that reference. While the result looked impressive at first glance, developers pointed out that it bore little resemblance to the enormous complexity involved in creating a real, fully functional video game, according to Forbes. Despite these limitations, the market response was dramatic. Investors appeared to interpret Genie 3 as a potential threat to traditional game development, leading to a sell-off of major gaming stocks. Developers and publishers, however, expressed frustration that such a narrow set of demonstrations could have such a profound financial impact. Creating a modern blockbuster game requires years of work by hundreds of people, including artists, programmers, writers, designers, and quality assurance teams. Even optimistic projections suggest that AI tools capable of replacing that entire process are still far in the future, per Forbes. The controversy surrounding Genie 3 also highlights how differently generative AI is progressing across creative fields. In visual art, AI has already reached a point where it can be difficult to distinguish between human-made and machine-made images, and many artists have seen their jobs threatened as a result. Video technology is advancing as well, but it remains far behind what would be required to produce full-length films or complex interactive experiences like video games, according to Forbes. That gap was underscored this week by the release of a historical AI-generated film project from director Darren Aronofsky, which was widely criticized across the entertainment industry. The backlash illustrated how uneasy Hollywood remains about the idea of AI taking on major creative roles, a sentiment that mirrors the skepticism now being voiced by game developers. For now, Genie 3 appears to be more of a provocative glimpse into what AI might someday achieve rather than a tool that can actually replace the massive effort behind today's games. Yet the market's reaction suggests that even early, imperfect demonstrations are enough to shake investor confidence, according to Forbes, leaving the gaming industry to deal with the fallout from a technology that may still be years away from fulfilling its boldest promises.

GTA 6 Developers Embrace AI, But Keep Generative Tools Out

Strauss Zelnick, CEO of GTA publisher Take-Two Interactive, has categorically stated that generative AI has had 'zero part' in what Rockstar Games is building with GTA 6. He underlined that developers are still creating the game's environments, characters, and narrative elements, and nothing is generated by algorithms. Rockstar's executives hold the view that automated systems will not achieve creative work because they require human artists to maintain their intentional designs and original artistic expressions. The studio considers human evaluation essential for their video game worlds because the game design needs both satirical elements and cultural references, alongside detailed . The decision shows the company's dedication to quality work, given the industry is now testing AI-based methods for creating content.

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.

Take-Two CEO Responds to Stock Price Drop Following Google Genie Announcement: 'I Think People Are Confusing Tools With Hits' - IGN

"I would never want to underestimate the importance of human genius." Last week, Google announced Project Genie, an AI-powered virtual world creator still in its infancy that seemed to spook a number of video game investors. Following the announcement, stock prices of companies such as Take-Two, Roblox, and Unity took a noticeable dip, seemingly due to a belief that Genie was going to mostly or fully replace user-generated content down the line. But at least one of those companies' CEOs isn't ruffled by the price drop: Take-Two's Strauss Zelnick. Speaking to IGN today ahead of the company's Q3 earnings call, Zelnick responded to my question about whether or not he saw Genie as a threat to Take-Two's business. He doesn't. Quite the contrary, he sound pretty positive. Here's his response in full: "This company and its products were built upon machine learning and artificial intelligence more than 25 years ago. That's the story of this business; we use computers to create what we do. So we're energized and excited by these new tools and the prospects that they bring. We have actively embraced new AI, I said so when we spoke about it in the last couple calls. [Author's note: I ask Zelnick something about AI most quarters as news-relevant, here's a summary from 2023 of what has been his consistent stance.] In fact, we have hundreds of pilots and implementations [of AI] across our company including with our studios. I think tools are what drive additional innovation in what we do, drive efficiency, and drive creativity, and that's our three-part strategy. "I think the confusion in the marketplace is somehow that tools equals properties...and tools and properties are very different things. Creators use tools to make amazing entertainment, and of course that will never change, and once you make amazing entertainment you have to market it worldwide, and the people who are best at marketing entertainment worldwide are big, significant entertainment enterprises with the balance sheet to actually support those launches, companies like us. So I feel more optimistic than ever that new technology is going to allow us to supercharge our business." In the past, including in the aforementioned 2023 conversation with Zelnick, I've asked him if he thinks generative AI will ever be able to create a GTA-like game wholesale, and his response has always been that it won't. But I asked him today if the appearance of Genie had changed anything for him; it hasn't. "I don't think theres any tool by itself that you can press a button and make a competitive property," Zelnick said. "Some romance novelists for example are using AI tools to write certain parts of their book, but they still have to come up with the concept, the characters, and the structure. I don't think you're going to find hit movies, hit novels, hit songs, being entirely created with technology with no creator interaction, it's just not the history of creativity. So I think perhaps people are confusing tools and technology with hits, and they're really different things, and I would never want to underestimate the importance of human genius, even with fantastic tools. I think fantastic tools unlock human genius to do great things." Okay, but what if those fantastic tools, available now to anyone, are used to make a clone of a GTA game? Does Zelnick have any intellectual property concerns? Sort of, sure, but he's seemingly of the mind that it's better to work with the community than against them. "We protect our intellectual property and we are respectful of toher people's intellectual property," he said. "At the same time we've allowed a lot of users to engage with a lot of our games and of course the FiveM business is an example of that. User-generated content can be and already is a big part of what we do around here. I also feel that user-generated content sort of stands side-by-side with professionally-generated entertainment. For example, YouTube is a huge business, but it represents about 12.5% of overall linear entertainment consumption. 87.5% is still old-fashioned, professional content made by human beings." [Take-Two cited Activate Consulting as the source of this stat following the call.] We also spoke to Zelnick about his confidence in GTA 6's release date, and Rockstar spinning up marketing for the game this summer. In today's earnings report, Take-Two announced it had brought in net bookings of $1.76 billion for the quarter, and that it's raising its expectations for the year to have net bookings between $6.65 billion to $6.7 billion.

Rockstar won't use generative AI for Grand Theft Auto VI

As artificial intelligence tools become more commonplace, many game studios have been testing them to speed up production. Games like Clair Obscur: Expedition 33 and Arc Raiders shipped with AI assets, but Grand Theft Auto 6 won't follow in their footsteps. Ahead of Rockstar parent company Take-Two's Q3 financial results, CEO Strauss Zelnick told GamesIndustry.biz that "generative AI has zero part in what Rockstar Games is building" for GTA 6. This follows a previous comment to CNBC, where Zelnick said, "there is no creativity that can exist by definition in any AI model, because it is data-driven." Zelnick says Rockstar's games are "handcrafted" and that's what makes them special. "They're built from the ground up, building by building, street by street, neighborhood by neighborhood," Zelnick said. "They're not procedurally generated, they shouldn't be. That's what makes great entertainment." While these comments might suggest the CEO is against the technology, he admits Take-Two has "hundreds of pilots and implementations" across the company to drive cost and time efficiencies. It just doesn't look like it will be a part of the creative process any time soon. These comments come after the release of Google's Project Genie, which claims to create "playable worlds" at the touch of a button. However, the examples we've seen so far are at the very least heavily inspired by other works. They can also only run for 60 seconds because of the sheer compute cost. Despite that, many game companies saw their stock prices crash, including Take-Two, with Google's announcement.

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.

The video game industry again rocked by AI

The impact was immediate: "Project Genie" sent ripples through large swaths of the industry. Take-Two Interactive and CD Projekt fell 8%, Roblox 13%, and Unity Software - which provides a development platform - slumped 24%. The new tool can generate a full environment and adapt it in real time to the user's actions. A video demonstration was published to showcase these capabilities. For now, access remains limited to the US and reserved for Google AI Ultra subscribers. It is still only a prototype, with stated constraints: one-minute sessions, high latency, and image quality capped at 720p. "Unlike experiences that are explorable in static 3D snapshots, Genie 3 generates the path to follow in real time as you move and interact with the world. It simulates physics and interactions for dynamic universes" Google explained in its presentation. Fei-Fei Li's start-up World Labs, a leading AI name in the US, is also on the case after launching "Marble" last month. A transformation of the sector appears inevitable, with a drastic reduction in development costs and timelines. The market very quickly priced in a scenario in which the traditional value chain is called into question. Roblox is built on a user-generated creation model, while Take-Two represents a more traditional approach to development.

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)

GTA 6 developers are excited about AI, but confirm no Gen AI is used in the game

It's 2026, and artificial intelligence is no longer just a buzzword. It is now part of everyday life across industries, including gaming. As studios experiment with new tools, there is still no clear agreement on how far AI should go in game development. Some creators see it as the future, while others remain cautious. With GTA 6 slated to launch this year, Take Two Interactive has now weighed in on the discussion. According to the company, AI will not be involved in the creative development of Rockstar's next game. Instead, the studio says it is relying on traditional methods for world building and storytelling, a stance likely to reassure players who worry that heavy AI use could make games feel less personal. However, this also doesn't mean that the developers are rejecting AI altogether. Read on to know more. Also read: You can beat GTA San Andreas in just one hour: Here's how Speaking to GamesIndustry.biz, CEO of Take-Two Interactive Strauss Zelnick explained that Rockstar Games is not using generative or procedural AI to create the world of GTA 6. According to him, the game's version of Vice City is being designed manually, with developers working on it building by building and street by street. He made it clear that every major creative decision is still handled by people, not machines. Zelnick's comments stand in contrast to growing concerns around AI generated content in games. Some players fear that heavy use of AI could lead to lifeless worlds or recycled ideas. Rockstar's approach suggests that GTA 6 will avoid that path. The company believes creativity cannot come from data alone, which is why AI is not being used to design characters, stories, or locations. While Take Two is avoiding AI for creative work, it is not rejecting the technology entirely. Zelnick said the company has been using machine learning tools for years to support development. These systems are mainly used to improve efficiency, reduce costs, and streamline internal processes. Hundreds of small AI pilot projects are reportedly running across different studios, but none of them are focused on creating actual game content. This means AI may help developers work faster or test systems more efficiently, but it will not write dialogue, design missions, or shape the game world. Zelnick was direct about this, stating that creativity cannot exist inside an AI model because it only works with existing data. Alongside these comments, Take Two also reaffirmed the release window for GTA 6 in its latest financial report. The company once again confirmed that the game is scheduled to launch on November 19, 2026. At launch, it will be available only on PlayStation 5 and Xbox Series X|S. There is still no official word on a PC version.