AI image generation is getting better, so much better that it could potentially present an existential threat for some video game developers.

2D animation is their trade but is also the primary task of services like Open AI’s image generator DALL-E and Vizcom. As record layoffs hit the gaming world, a new Wired investigation shows that these companies may be looking to take advantage of AI. 

The report interviewed artists, illustrators, and designers across the video game industry and centered on Call of Duty producer, Activision Blizzard. Microsoft completed its acquisition of Activision in October 2023, slashing 1,900 jobs from its gaming division just a month later. Meanwhile, internal communications published by Wired reveal that, at the time, the company was more heavily considering the usage of AI.

Notably, there’s no discrete tie between job loss and AI uptake. However, the workers quoted in Wired’s report, and several on social media have been more willing to draw those comparisons. What is true is that video game creators, with a predominantly nonunion workforce, are especially sensitive to AI industry upheavals. AI is not a future problem: it’s here now, and the video game industry is adapting to it. 

AI is taking off in video game development 

Using AI tools in video game development is no longer a distant future. Throughout 2023, the investigation reports that Activision’s then-CTO, Michael Vance, sent a collection of emails supporting the use of AI in their work. By the end of the year, Call of Duty: Modern Warfare 3 had an AI-generated cosmetic available for purchase, per Wired. A representative for Activision Blizzard told Fast Company that, as a part of Microsoft, they strictly adhered to the company’s AI guidelines. 

Nvidia has also been premiering some generative AI tools for video game development, though it has hesitated to truly incorporate them. Primary among these tools is Nvidia’s NPC tools, which generate dialogue for a game’s supporting and background characters. Meanwhile, the AI company, Artificial Agency, raised $16 million in its mission to make NPCs more realistic. 

Through digital-image generation, AI has the power to upend many creative industries. Video games, it seems, may be taking to it the quickest.

A CVL Economics study surveyed three creative industries: film and television, music, and gaming. Of the three, gaming was far in the lead for its AI uptake, with around 86.7% reporting the adoption of generative AI tools. That same report estimated that 13.4% of gaming jobs would be disrupted by AI by 2026. 

That uptake is happening in live time: A Game Developers Conference survey indicated that about a third of employees use AI in their operations. In the same report, 84% of respondents expressed concern about the ethics of AI usage in the gaming industry. 

Meanwhile, layoffs have been decimating the video game industry 

Layoffs have hit the gaming industry hard. An estimated 10,500 people were laid off from game development positions in 2023. In a recent International Game Developers Association survey, 4.8% of respondents reported being unemployed at the time of response. 

Microsoft, having acquired Activision Blizzard, has been especially hard-hit with gaming layoffs. The company shuttered Arkane Austin, Tango Gameworks, and Alpha Dog Games studios and laid off 1,900 Xbox and Activision employees. Sony also cut a significant chunk of its PlayStation workers, laying off 900 employees or about 8% of its global head count. The list of affected workers keeps on growing. 

No external authority has substantially tied job loss to AI advancement; in fact, many have attributed the layoffs instead to economic concerns paired with games that were anticipated to do well but instead flopped. While many entertainment industries have returned to their prepandemic levels, the gaming industry is currently operating billions of dollars lower than expected.

Even without a direct correlation to point to, several laid-off workers, including those quoted in the Wired investigation, were more willing to draw the connection. Some developers have taken to Reddit, and one wrote, “Getting a job in the game industry is already hard. But leaving a company and a nice team because AI took my job feels very dystopian.” 

It’s something that even if it’s not happening at a large scale now, could definitely start happening in the future as AI becomes more advanced and studios’ budgets shrink.