Video Game Stocks Dip As Concerns Over AI Arise With Google Genie

While Google’s foray into console gaming ultimately failed with its Stadia, the tech giant never really let go of its ambitions to disrupt the video game market. It’s a $188 billion industry, after all. But now, Google is back with a new weapon that has effectively taken video game companies down a notch. That weapon is called Google Genie 3.

Developed by Google DeepMind, Google Genie 3 is a “general-purpose world model” that allows users to generate and explore interactive, infinitely diverse” open worlds through images or prompts.

With the release of this new AI Model, stock prices of major video game companies plummeted, including Tencent (-2.5%), Embracer Group (-5%), Nintendo (-5%), CD Projekt Red (-8%), Ubisoft (-7%), Take-Two Interactive (-10%), Roblox (-13%), and Unity (-24%).

The effect came in two ways: investors hope that this disruption will make game development more accessible to unskilled people. Effectively, in the eyes of these investors, Google Genie 3 is one step towards every person being able to create their own Triple-A game. While Genie cannot do that now, they certainly think this is the direction AI in video game development will be moving towards, making large video game corporations unnecessary.

On the other hand, this development also raises concerns over game developers actually using tools like Google Genie 3 to create games, impacting investor confidence. While the industry currently has an outwardly cold reception towards this practice, things like this will make AI use in game development more prevalent and accepted.

In either case, Google Genie 3 is successfully disrupting the video game market, for better or for worse. While it can’t make Skyrim or The Witcher yet, as Genie 3 is subject to multiple limitations, there’s no stopping tech giants from developing this tech further, and as a result, give us consumers more slop to enjoy.

This story was originally published by GameDaily on Jan 30, 2026, where it first appeared in the News section. Add GameDaily as a Preferred Source by clicking here.