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.

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