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The global video games industry is set to be disrupted by the advent of artificial intelligence models that generate interactive 3D environments.

Google DeepMind and Fei-Fei Li’s $1bn start-up World Labs are among the leading AI groups arguing that so-called “world models” — systems designed to navigate and recreate the physical world — could reshape the multibillion-dollar gaming sector.

“Creating software and games in particular is changing a lot, and I expect it to change, maybe entirely, over the next few years,” said Shlomi Fruchter, co-lead of Genie 3, DeepMind’s world model.

“This will go and empower creators and developers to build things faster, better and in ways that weren’t done before . . . I don’t think it [will] replace the existing experience [but we will see] more types of experiences that are not available today.”

AI companies such as Elon Musk’s xAI and Nvidia are also seeking to embed world models into robots and autonomous vehicles. But more immediate gains could emerge through the gaming sector, which is expected to generate almost $190bn in revenues this year according to industry research group Newzoo.

Existing generative AI tools are already being used to create visual assets for games, such as unique landscapes, and characters. 

Game Gears, part of the GDEV holding, has leveraged AI technology during the development of ‘Aliens vs Zombies: Invasion’ © Game Gears

In May, Epic Games and Disney introduced an AI-powered Darth Vader — a version of the Star Wars character built with Google and ElevenLabs — as an interactive non-player character in Fortnite.

Meanwhile, Alexander Vaschenko, chief executive of Game Gears, says AI has quadrupled the speed of developing titles such as the studio’s Aliens vs Zombies: Invasion.

“Based on my professional experience, I firmly believe that both the video game and film industries will soon be unable to function without AI,” he added.

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AI companies are betting that the release of new and more powerful world models — which generate 3D, interactive environments from text prompts — will further accelerate AI adoption within games companies.

World Labs, founded by the AI pioneer Fei-Fei Li, launched a world model called Marble last month. Another AI group, Runway, which works with games studios, launched its first world model in December.
Li said the technology will affect game engines such as Unity and Epic’s Unreal. “This is all up for disruption,” she added. “Simulation gaming engines are due for improvements.”

In future, AI experts said players will be able to create new gaming worlds themselves, while developers can reduce the need for expensive software or specialised skills to generate content.

“Now a gamer in front of this world model can put themselves into a virtual world,” said Eric Xing, president of the Mohamed bin Zayed University for Artificial Intelligence in Abu Dhabi. “That makes the game industry very different from today, because producing a personalised game is now a straightforward process.”

Critics argue that increased use of AI will lead to developers and artists being replaced, with game visuals being overwhelmed by “slop” or low-quality AI-generated material.

Six European video games unions condemned the growing use of AI in their industry this month, saying the tools . . . were “being forced upon us, even though they degrade our working conditions.”

Optimists, however, say it may alleviate costs, increase creativity, and avoid burnout among developer staff. That would be a boon in an industry where leading games — known as triple-A titles — can take several years and cost more than $1bn to develop.

DeepMind’s Alexandre Moufarek, formerly an associate producer at French games maker Ubisoft, said he hoped that world models would help give developers space to “find the fun” and “try new ideas and take risks again”.

“Often, that’s the time that’s missing at the end of the production. Christmas is coming, and you need to release the game, and you just don’t have time to polish the things that you wanted [or] debug things correctly,” he added.

“The more we put those models in the hands of creatives, I’m sure we are going to discover new ways of working that we haven’t even anticipated yet.”