2025 was the year generative AI made its presence felt in the video game industry. Its use has been discovered in some of the most popular games of the year, and CEOs from some of the largest game studios claim it’s being implemented everywhere in the industry including in their own development processes. Meanwhile, rank-and-file developers, especially in the indie games space, are pushing back against its encroachment, coming up with ways to signal their games are gen-AI free.

Generative AI has largely replaced NFTs as the buzzy trend publishers are chasing. Its proponents claim that the technology will be a great democratization force in video game development, as gen AI’s ability to amalgamate images, text, audio, and video could shorten development times and shrink budgets — ameliorating two major problems plaguing the industry right now. In service to that idea, numerous video game studios have announced partnerships with gen-AI companies.

Ubisoft has technology that can generate short snippets of dialogue called barks and has gen-AI powered NPCs that players can have conversations with. EA has partnered with Stability AI, Microsoft is using AI to analyze and generate gameplay. Outside of official partnerships, major game companies like Nexon, Krafton, and Square Enix are vocally embracing gen AI.

As a result, gen AI is starting to show up in games in a big way. Up until this point, gen AI in gaming had been mostly relegated to fringe cases — either prototypes or small, low-quality games that generally get lost in the tens of thousands of titles released on Steam each year. But now, gen AI is cropping up in the year’s biggest releases. ARC Raiders, one of the breakout multiplayer shooter hits of the year, used gen AI for character dialogue. Call of Duty: Black Ops 7 used gen-AI images. Even 2025’s TGA Game of the Year, Clair Obscur: Expedition 33, featured gen-AI images before they were quietly removed.

Reaction to this encroachment from both players and developers has been mixed. It seems like generally, players don’t like gen AI showing up in games. When gen-AI assets were discovered in Anno 117: Pax Romana, the game’s developer Ubisoft claimed the assets “slipped through” review and they were subsequently replaced. When gen-AI assets were found in Black Ops 7, however, Activision acknowledged the issue, but kept the images in the game. Critical response has also been lopsided. ARC Raiders was awarded low scores with reviewers specifically citing the use of gen AI as the reason. Clair Obscur, though, was nigh universally praised and its use of gen AI, however temporary, has barely been mentioned.

It seems like developers are sensitive to the public’s distaste for gen AI but are unwilling to commit to not using it. After gen-AI assets were discovered in Black Ops 7, Activision said it uses the tech to “empower” its developers, not replace them. When asked about gen AI showing up in Battlefield 6, EA VP Rebecka Coutaz called the technology seductive but affirmed it wouldn’t appear in the final product. Swen Vincke, CEO of Baldur’s Gate 3 developer Larian, said gen AI is being used for the studio’s next game Divinity but only for generating concepts and ideas. Everything in the finished game, he claimed, would be made by humans. He also hinted at why game makers insist on using the tech despite the backlash developers usually receive whenever it’s found.

“This is a tech-driven industry, so you try stuff,” he told Bloomberg reporter Jason Schreier in an interview. “You can’t afford not to try things because if somebody finds the golden egg and you’re not using it, you’re dead.”

Comments from other CEOs reinforce Vincke’s point. Junghun Lee, the CEO of ARC Raiders’ parent company Nexon, said in an interview that, “It’s important to assume that every game company is now using AI.”

The problem is, though, gen AI doesn’t yet seem to be the golden egg its supporters want people to believe it is. Last year, Keywords Studios, a game development services company, published a report on creating a 2D video game using only gen-AI tools. The company claimed that gen-AI tools can streamline some development processes but ultimately cannot replace the work of human talent. Discovering gen AI in Call of Duty and Pax Romana was possible precisely because of the low-quality of the images that were found. With Ubisoft’s interactive gen-AI NPCs, the dialogue they spout sounds unnatural and stilted. Players in the 2025 Chinese martial arts MMORPG Where Winds Meet are manipulating its AI chatbot NPCs to break the game, just like Fortnite players were able to make AI-powered Darth Vader swear.

For all the promises of gen AI, its current results do not live up to expectations. So why is it everywhere?

One reason is the competitive edge AI might but currently can’t provide that Swen Vincke alluded to in his interview with Bloomberg. Another reason is also the simplest: it’s the economy, stupid. Despite inflation, flagging consumer confidence and spending, and rising unemployment, the stock market is still booming, propped up by the billions and billions of dollars being poured into AI tech. Game makers in search of capital to keep business and profits going want in on that. Announcing AI initiatives and touting the use of AI tools — even if those tools have a relatively minor impact on the final product — can be a way to signal to AI-eager investors that a game company is worth their money.

That might explain why the majority of gen-AI’s supporters in gaming come from the C-suite of AAA studios and not smaller indie outfits who almost universally revile the tech. Indies face the same economic pressure as bigger studios but have far fewer resources to navigate those pressures. Ostensibly, indie developers are the ones who stand to benefit the most from the tech but, so far, are its biggest opponents. They are pushing back against the assertion that gen AI is everywhere, being used by everybody, with some marking their games with anti-AI logos proclaiming their games were made wholly by humans.

For some indie developers, using gen AI defeats the purpose of game making entirely. The challenge of coming up with ideas and solutions to development problems — the things gen AI is supposed to automate — is a big part of game making’s appeal to them. There are also moral and environmental implications indie developers seem especially sensitive to. Gen-AI outputs are cobbled from existing bodies of work that were often used without consent or compensation. AI data centers are notorious for consumptive energy usage and polluting their surrounding areas, which are increasingly focused in low-income and minority communities.
With its unrealized promises and so-far shoddy outputs, it’s easy to think of gen AI as gaming’s next flash in the pan the way NFTs were. But with gaming’s biggest companies increasingly reporting their use, gen AI will remain a lightning rod in game development — until the tech improves, or, like with NFTs, the bubble pops.