AI drives a boom in new games but big developers dominate
More instinctive technology is accelerating production amid concerns it risks losing gamers’ trust
When Stanislas Marchand was heading up game development for French mobile gaming unicorn Voodoo, his team tested 3,000 new titles per year.
“It was an industrial process,” says Marchand, who was there until 2024. “Out of those, only one or two would go on to make $10mn-plus per year.”
Those 3,000 ideas came from Voodoo’s internal teams as well as independent studios and, even after the advent of generative AI, productivity savings were relatively modest, he says. Pre-AI, it took about 14 days to design, test and get a mobile game ready for market. With AI, the team took 10 days.
That appears at odds with predictions across many industries in 2026, as adoption of AI leads to grim forecasts about the future of work. Despite some lay-offs, the view of many in gaming is that AI will struggle to replace the central role of human creativity.
“What makes a good game is what we call ‘game feeling’,” he says. “So far, AI cannot do that,” Marchand says.
Nonetheless, AI — and particularly the onset of “vibe-coding”, which allows people with little knowledge of software engineering to use AI to create concepts and games — has led to a massive increase in games coming to market. Global data from research company ATTN Economy shows that 181,000 games were released in the six months to May, 43,500 on iOS and 137,000 on Android — increases of 118 per cent and 73 per cent respectively year on year.
This increase has come alongside some significant job losses in the gaming industry. Microsoft lost staff in its XBox division this month and cut 10 per cent in its Stockholm-based King division, famous for Candy Crush. A report by the GDC Festival of Gaming in May found that one in four employees in gaming had been laid off in the past two years.
The report found that 52 per cent of gaming professionals thought generative AI was bad for the industry, up from 30 per cent in 2025 and 18 per cent in 2024. Workers in visual and technical arts (64 per cent) and game design and narrative (63 per cent) had the most unfavourable views. Only 7 per cent said that AI was having a positive impact.
Some fans are also unhappy. The much-anticipated Crazy Taxi: World Tour was embroiled in online controversy over whether generative AI had been used in its development. This prompted Sega to acknowledge that it had utilised generative AI “as a support tool for developers [but] no AI was used in reference to performers in the game”.
Those more bullish on generative AI see performers — or non-playing characters (NPCs) — as the most exciting use-cases. Where interactions with characters in role-playing and artificial world games such as Zelda or Call of Duty were heavily scripted, AI raises the prospect of true player-to-NPC dialogue.
“Non-playable characters are already getting more powerful, but these things are about to become deeply personal. They’re going to remember you, and remember that you played this game two months ago,” says Josh Chapman, co-founder and managing partner at Konvoy, a venture capital firm that invests in early-stage gaming start-ups.
Vlastimil Venclik, co-founder and chief executive of Czech gaming start-up Valka AI, agrees, and says there has been an exponential increase in the power of AI within games compared with two years ago. As models improve, so will storytelling and dialogue — and attitudes to AI may change.
“I see some gamers are against it, but gaming studios are all using AI,” says Venclik. “I believe [their opposition is] just a trend which can fade away as fast as . . . it appears. In five, 10 years, my kids . . . probably won’t know the difference, right?”
Others are sceptical. ATTN Economy’s Lexi Sydow notes that data from Klaviyo, a digital marketing platform, shows that 13 per cent of consumers trust AI. When they see marketing content has been created with AI, they are four times less likely to trust that brand.
“There’s a cost to AI slop and it comes with a hefty price tag: trust,” Sydow says. “In gaming, it is like that on steroids. If it looks like it is AI-driven and not human-driven, it could fracture trust . . . if the storyline or the art drifts, people get really upset.”
The right approach will be key for the few large gaming conglomerates that dominate the industry. Sydow notes that the top 1 per cent of publishers controlled $75.6bn of revenue in 2025 with the other 99 per cent collectively making $6.1bn. That top 1 per cent saw 40.2bn downloads in 2025, accounting for nearly 80 per cent worldwide.
Vibe-coding may have lowered the technical bars to entry in game development but Chapman predicts this will not break the big companies’ dominance. “The incumbents have such large balance sheets [and] are building up incredible talent and decades of data. That is really, really hard to compete with if you’re an up-and-coming start-up with a $4mn seed round.”
From Slack workplace collaboration to Helsing military technology to Elon Musk’s SpaceX, gamers and gaming founders have played oversized roles in the wider economy. AI or not, that will continue to be the case.
“The gaming market is the most competitive market in the entire planet . . . no other industry has 10,000 new [start-up] competitors a year,” says Chapman. “Gaming technologies proliferate into other markets and some of the world’s best technologies are being built by gaming founders.”