AI fears behind gaming selloff are overblown, mBank says
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Genie’s promotional videos suggest that AI tools could eventually lead to a surge in new games and solo projects, intensifying competition among smaller studios. Photo by INA FASSBENDER/AFP via Getty Images/Postmedia filesArticle contentThe recent selloff in video-game developer stocks — tied to fears of disruption from Google’s Project Genie AI tool — is “unjustified,” mBank SA analysts said.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentShares of Unity Software Inc., Roblox Corp. and CD Projekt SA plunged on Friday after Google unveiled its AI prototype for generating virtual 3D worlds, on concerns it could threaten existing game developers. Unity and Roblox rebounded in premarket trading Monday, while CD Projekt fell in Warsaw for a third-straight session.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.We apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Play VideoArticle contentArticle contentmBank said the selloff overlooked the Google tool’s current limitations, adding that the technology will ultimately benefit larger studios.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article content“Given the current usability of Project Genie, we regard Friday’s selloff in game-developer stocks as an unjustified overreaction,” mBank analyst Piotr Poniatowski said. “Counterintuitively, we believe AAA game developers will benefit most from such tools,” he added, referring to bigger studios.Article contentArticle contentThe prototype Genie web app allows users to generate their own playable worlds by typing in text prompts or uploading images. It allows the creation of characters who can travel through various environments, albeit while currently only offering limited playing times and experiences.Article contentFor mBank’s Poniatowski, Genie’s promotional videos suggest that AI tools could eventually lead to a surge in new games and solo projects, intensifying competition among smaller studios. The largest developers with strong franchises and “immersive” storytelling, are unlikely to be “much at risk,” he noted.Article content“If we look from a pure game creation perspective, we don’t see AAA studios losing their value proposition,” noted Wedbush analyst Alicia Reese. “Existing platforms remain well-positioned to compete.”Article contentStill, concerns around AI continued to weigh on European gaming stocks on Monday. CD Projekt fell a further one per cent, while Ubisoft Entertainment SA declined 2.9 per cent.Article contentBloomberg.comArticle contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Play VideoArticle contentTrending FAA backs Trump’s attacks on Canada over airplane certifications Airlines Palantir earnings arrive just as stock could use some good news Investor Subscriber only. In Canadian real estate's longest winter, buyers hold the power as sellers face reality Subscriber only Real Estate TFSA vs. RRSP: How Canadians from gen Z to the baby boomers can get the most out of their savings Personal Finance U.S. natural gas prices on track for biggest loss in 29 years Oil & Gas Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. FAA backs Trump’s attacks on Canada over airplane certifications Airlines Palantir earnings arrive just as stock could use some good news Investor Subscriber only. In Canadian real estate's longest winter, buyers hold the power as sellers face reality Subscriber only Real Estate TFSA vs. RRSP: How Canadians from gen Z to the baby boomers can get the most out of their savings Personal Finance U.S. natural gas prices on track for biggest loss in 29 years Oil & Gas