Google’s Project Genie sparks fall in gaming shares as industry experts question use-case

• Google’s AI world-building tech Project Genie, rolled out to US users only, enables the creation of 60-second virtual worlds.
• Shares in Take-Two, Roblox and Unity fell on the news of the announcement.
• Storygrounds CEO Andrew Green said the market reaction “tells you everything about how little Wall Street understands games”.
• Gossamer Consulting Group principal Eric Kress questioned Google’s history in the games space.

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Shares in some of the world’s largest public games companies fell on Friday after Google rolled out its AI-powered world-building tech Project Genie in the US.

Available to Google AI Ultra subscribers in the country, the tech is able to build virtual worlds through text prompts and uploaded images. Users can choose their perspective, such as first-person or third-person, and then take control of their character to navigate the space.

At present, Project Genie can only generate worlds that last 60 seconds. The web app is powered by Genie 3, Nano Banana Pro and Gemini.

Share price shock

The release has prompted a sell-off of shares in public games companies like Take-Two, Unity and Roblox.

Shares in Grand Theft Auto 6 publisher Take-Two fell by 7.9% at close on Friday compared to the day prior. Roblox shares fell by approximately 13.2%, while Unity stock fell by 24.2%. Elsewhere, Capcom, which recently released its financials, saw shares decline from Friday by 7.4% on Monday.

Shares in companies like EA and Ubisoft appear unaffected, though the latter was recently hit by a sharp decline following the announcement of its restructuring.

“The direction is right”

Reaction to Project Genie has ranged from excitement of the tech’s possibilities to experts detailing the realities of game development.

Storygrounds CEO Andrew Green said while Google’s DeepMind, the company behind the project, was doing “genuinely impressive research”, the market reaction “tells you everything about how little Wall Street understands games”.

“Here’s what people keep missing about games: rendered spaces mean nothing without design,” said Green. “The variables that make open worlds social, fun, replayable, meaningful are essentially infinite. Physics. Economy. Progression. Social. Narrative. Emergent behavior. Balance. The stuff that makes you feel something. You can’t prompt your way to that. Not yet. Not for a long, long time.

“Is this pointing toward something? Absolutely. This is like finding coal in 1000 BC and someone squinting really hard at envisioning the industrial revolution. The direction is right. The timeline is not what traders think it is.

“The fundamental value prop of world models is real and exciting. But if you’re selling game company stock because of a 60-second, laggy, inconsistent tech demo that forgets its own paint trails, you don’t understand what games actually are.”

Unity CEO tempers jitters

Unity CEO Matthew Bromberg, whose company has been hit by a falling share price, took to LinkedIn to discuss world models and why the current tech is unsuitable on their own game games.

“Rather than viewing this as a risk, we see it as a powerful accelerator,” said Bromberg.

“Video-based generation is exactly the type of input our Agentic AI workflows are designed to leverage—translating rich visual output into initial game scenes that can then be refined with the deterministic systems Unity developers use today.

“Our agents already generate high-quality scenes from static video. Interactive, camera-controllable video from world models would further enhance this pipeline and materially improve the fidelity and speed of early-stage content creation. We believe this represents a meaningful step forward for AI-driven development across the industry.”

Ubisoft production director and closer Yoni Dayan commented that the investor reaction exposed how little investors understand game development.

“When 60 seconds of unstable 720p footage triggers at least partially billion-dollar valuation swings, and big corporations like Epic to issue damage control statements, it exposes how little investors understand about game development complexity,” he said.

“This measures financial literacy on AI capabilities more than actual industry disruption risk. It might also be an indication of the type of game industry some investors wish for, with the everlasting ‘dream’ of GenAI game making tools so efficient they could do the work of hundreds.”

Gossamer Consulting Group principal Eric Kress questioned Google’s history in its gaming ventures, citing the failure of streaming platform Stadia, YouTube Gaming and other projects.

“The Pattern: Google lacks the organisational DNA for gaming,” he said. “They underestimate the long-term commitment required, expect YouTube-scale growth immediately, and pull the plug when reality doesn’t match projections.

“So what about Project Genie? Could AI-generated games disrupt UGC platforms like Roblox or UEFN? Possibly. Will it replace premium triple-A titles like Madden, Call of Duty, Elden Ring, or GTA? Absolutely not.”

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