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.