Reflecting on the Games Industry's Turbulent Year with AI

The games industry in 2025 was marked by the pervasive presence of AI, with hardly a week passing without a significant story about its applications and implications. Unlike previous trends such as NFTs and the metaverse, which rose and fell quickly, AI has deeply embedded itself in the tech industry, showing no signs of receding. Sam Altman noted that ChatGPT has 800 million weekly active users, and AI has become integral to internet search algorithms and various other applications, including toys, albeit with mixed results. However, AI is also a deeply divisive technology, with its proponents in the games industry highlighting its potential for streamlining processes, enhancing efficiencies, and fostering new ideas. On the other hand, critics point to ethical concerns surrounding training data, the substantial energy consumption of AI, its threat to jobs, particularly in QA and art, and most critically, its potential impact on the craft of game development. Throughout the year, GI's contributing editor Rob Fahey provided insightful commentary on AI, including its legal implications, its ability to accelerate development, its impact on hiring, and how AI-generated assets can devalue premium games. Companies like Atelico, Uthana, and Razer were among those that aggressively marketed their AI-enabled products and services. Atelico launched its AI Engine, promising to enable new interactive experiences, and subsequently raised $5 million to establish an AI-first games studio. Uthana secured $4.3 million to revolutionize 3D character animation with generative AI, while Razer collaborated with Side to build a large-scale playtesting platform that utilizes AI to eliminate duplicate bug reports. Several major game companies, notably Roblox and Krafton, championed AI, with Roblox unveiling a suite of generative AI-powered tools at the Roblox Developers Conference and Krafton repositioning itself as an AI-first company. The directors of Krafton-published games shared their experiences of using AI in development processes, although the heads of Krafton-owned studio Neon Giant later clarified they were not part of the AI-first policy, emphasizing their pride in their traditional game-making approach. Nexon CEO Junghun Lee suggested that every game company is likely using AI, and Ubisoft revealed an AI NPC project called Teammates. Epic Games was particularly bullish on AI, with the company's product management director, Dan Walsh, stating that they wouldn't police the use of AI for generating thumbnails in Fortnite UGC. The introduction of an AI-voiced Darth Vader in Fortnite led to an unfair labor practice charge by the US actors' union SAG-AFTRA. Epic Games head Tim Sweeney defended AI, suggesting it could transform gaming by increasing human productivity. In contrast, many games company CEOs offered more cautious assessments of AI, with Take-Two Interactive head Strauss Zelnick describing artificial intelligence as an oxymoron but acknowledging its potential to make the business more efficient. Embracer CEO Phil Rogers called for the smart implementation of generative AI in ethical and sustainable ways, emphasizing that human authorship is final. Relic Entertainment head Justin Dowdeswell viewed AI as a tool to augment skills, not replace people. Rockstar co-founder Dan Houser expressed skepticism about AI, describing the output of large language models as generic and questioning the creativity of those using AI. In Japan, Nintendo denied reports that it had been lobbying the government to protect its intellectual property against generative AI, while Sega announced plans to use AI in game development but with caution. One area where AI is significantly impacting game development is QA testing, with technology emerging that could replace or augment human roles. A report found that 30% of game developers believe AI will play an extremely important role in QA processes. However, the CEO of Testronic, Sharon Baylay-Bell, insisted that AI won't completely replace humans in areas like localization, as AI lacks the ability to understand emotion, tone, and cultural nuances. The use of AI in generating voices has been particularly contentious, with rows over AI speech in games like Arc Raiders and the use of AI to replicate voice actors without consent. SAG-AFTRA's strike over protections against AI in contracts eventually led to an agreement, but the issue remains contentious. The year ended with a significant controversy after Larian CEO Swen Vincke mentioned experimenting with AI, prompting a clarification that the studio is not replacing concept artists with AI but using it only at the very early ideation stages. As the industry moves into 2026, public perception of AI in PC and console games remains largely negative, with concerns on both the development and player sides. The US Copyright Office clarified that generative AI output cannot be protected by copyright unless an author or artist contributes to the creative process, and Revolution Software head Charles Cecil shared a cautionary tale about the expensive mistake of using AI to enhance artwork, which lacked detail and required redrawing from scratch. The future of AI in the games industry is complex, with both potential for innovation and significant challenges to overcome.