Many video game companies’ stock prices have fallen in response to Google’s rollout of Project Genie.
Last week, the company announced it had begun rolling out a prototype version of Project Genie, an AI tool that allows users to generate their own playable worlds.
Google says users can create worlds by typing prompts or uploading images. Next, create your character in a similar way.
Users can also define other specific properties, such as how the character moves and whether the world is explored in first or third person. As the player explores the world, tools generate it in real time based on the actions the player takes and where the camera moves.
Some users have already started sharing videos of their creations on social media, some of which include copyrighted characters.
After the release of this tool, the stock prices of many video game companies on the Nasdaq Stock Exchange fell significantly.
The most notable of these declines was Unity’s stock price, which closed at $38.40 the previous day and plummeted to $27.80 the following day, a 35% drop. Other drops include CD Projekt, Nintendo, Roblox, and Rockstar’s parent company Take-Two.
AI advocates have already begun to suggest that as Project Genie continues to evolve, it could reduce the need for game developers (not to mention its current significant limitations).
But William Blair analyst Dylan Becker told Bloomberg that those concerns are “overblown.” “We believe the movement we’re seeing in gaming stocks today significantly downplays the importance of creativity and social/network effects in open world games,” added Evercore ISI analyst Robert Coolbris.
Investors’ initial reaction was that such companies could be adversely affected by Google’s technology, so the multiple declines in stock prices across the industry appear to be an immediate reaction to these theories.
Unity CEO Matthew Bromberg posted a message on X in response to the significant drop in his company’s value, saying that the growth of these AI “world model” creators is a positive for the industry, and that Unity will actually leverage them rather than compete with them.
“Advances in large-scale ‘world models,’ whether developed by partners such as Google or not, have significantly expanded the frontiers of interactive content creation,” he said. “These models can generate high-quality, interactive, video-like experiences from natural language or minimal input.
“Currently, they are primarily editable through prompts, limiting the level of determinism and precision needed for production-grade game mechanics. As a result, their output remains probabilistic and non-deterministic, making them unsuitable on their own for games that require a consistent and reproducible player experience.”
“Rather than seeing this as a risk, we see it as a powerful accelerator. Video-based generation is exactly the type of input that our Agentic AI workflow is designed to leverage, allowing us to transform rich visual output into early game scenes that can then be refined with the deterministic systems used by Unity developers today.”
“Our agents are already generating high-quality scenes from static videos. Interactive, camera-controllable video from world models will further enhance this pipeline and significantly increase the fidelity and speed of early-stage content creation. We believe this is a meaningful step forward for AI-driven development across the industry.”
“Unity’s role is to operationalize these advances. The output from the world model is fed into Unity’s real-time engine, where it is transformed into a structured, deterministic, and fully controllable simulation. Within Unity, authors define physics, gameplay logic, networking, monetization, and live operation systems to ensure consistent behavior across devices and sessions.”
“This combination enables developers to move from concept to scalable product faster. AI accelerates environment and asset generation, and Unity provides the execution layer that transforms the generated content into reliable, monetizable experiences.”
