Executives at Korea's leading game companies moved to quell worries that artificial intelligence (AI) will replace game development, saying "AI is not a threat but an opportunity." After Google DeepMind unveiled its AI world model "Project Genie" ("Genie 3") last month, which can generate a real-time, interactive three-dimensional (3D) virtual world from a single line of text or a single image, the market predicted that AI would soon encroach on game production.
Game companies agreed that AI will help boost productivity by shortening game development time, but they stressed that people are still needed to build blockbuster "AAA" titles that require deep immersion and sophisticated systems.
◇ Despite the shock of "Genie 3," game companies say "AAA blockbusters are the realm of people"
According to the game industry on the 13th, the heads of major Korean game companies, including Krafton, NCSOFT and Kakao Games, said in earnings conference calls held one after another this week that AI will not take jobs in the game industry but will serve as a useful tool that helps developers' work.
Krafton CEO Kim Chang-han said in a conference call for "2025 fourth-quarter and annual earnings" on the 9th that he does not think "Genie 3" by Google will replace games in the short term. He said, "Running Genie 3 requires a lot of graphics processing unit (GPU) capacity, and the runtime itself is still short." He explained that while it is possible to implement a game-like virtual world operable through simple commands, the video length Genie 3 can currently generate is only 60 seconds, and its performance is still insufficient to realize the refined design, art, and story that are core elements of games.
However, Kim said the potential ripple effects of AI cannot be ignored and argued for a preemptive response. He said, "I agree that advances in AI technology have a disruptive impact not only on work but also on business," adding, "In this situation, we are looking at it from two angles: how to protect and expand our core business, and how to create new business opportunities."
In fact, Krafton declared in Oct. last year that it would transform into an "AI-first" company. The company said it would invest 100 billion won to strengthen its AI infrastructure and apply AI across the entire decision-making process to boost productivity. Along with this, it also halted new hiring. The industry assessed that Krafton has begun improving operational efficiency and cutting labor costs by expanding AI adoption.
NCSOFT also said market concerns about "Genie 3" are excessive. Co-CEO Park Byung-moo said in an earnings call on the 10th, "The market is overreacting," adding, "AI alone cannot make a AAA game like 'Grand Theft Auto (GTA) 6.'" He explained that AAA games require the construction of sophisticated systems, and many gamers feel resistance to AI-made art or characters, making it difficult to use AI across the board.
Having emerged from losses last year, NCSOFT declared this year a "year of high growth" and said it would raise revenue to 2.5 trillion won through core intellectual property (IP) and new releases. As part of that, Park said the company will use AI this year to improve production efficiency in game making. He said, "Using AI can help improve productivity in game development," adding, "Through our AI subsidiary (NC AI), we plan to run a companywide productivity improvement task force (TF) using AI this year."
Kakao Games also plans to actively use AI in developing new titles to improve development efficiency and reduce labor costs. With a gap in new releases, Kakao Games posted its first annual loss since its founding last year, and this year it plans to seek a rebound by launching major new titles. CEO Han Sang-woo said in an earnings call on the 11th, "Over the past two years, we have prepared to actively use AI tools and solutions in (game) development and services," adding that with major new releases in the second half, the company will manage costs at a controllable level by using AI technology without adding staff.
He went further, saying, "We think advances in AI technology will bring very large structural changes to the industry within two to three years," and added, "On the development side, we expect the various solutions available now to deliver tremendous efficiency gains, and we are preparing structures by studio and genre to adopt them."
◇ "We must raise development productivity with AI"
Although AI still cannot perform highly intricate tasks, the industry consensus is that using AI in the game development process is an unstoppable trend. If AI handles repetitive tasks such as simple character movement in games, developers can focus on more important work, speeding up development and likely cutting costs.
In particular, for game companies suffering from labor shortages, AI could be an opportunity. SHIFT UP CEO Kim Hyung-tae said at the "2026 Economic Growth Strategy National Briefing" held at the Blue House last month that while SHIFT UP puts 150 people on a single game, Chinese game companies use 1,000 to 2,000 people to make a game, arguing that AI should be actively introduced into the production process. He said, "Because we lack the power to compete in quality or quantity, in Korea a single developer must use AI to play the role of 100 people to compete with Chinese game companies."
Meanwhile, "Genie 3," unveiled by Google last month, sent shock waves through the global game market. "Genie 3" drew attention for going beyond simply generating backgrounds and video to implementing an "interactive" 3D virtual world that responds in real time to user input. The market's sense of crisis spread that AI would replace existing development engines by performing complex coding and physics calculations on its own.
Concerns that an era in which anyone can easily generate games directly with AI would shake the traditional game development structure spooked investors, and game stocks fell across the board right after "Genie 3" was unveiled. Shares of game engine company Unity plunged more than 24%, and shares of Roblox and U.S. game company Take-Two Interactive, the developer of GTA 6, also fell more than 10%.