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
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— 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.
