Recently, Take-Two’s share price got hammered after Google unveiled Project Genie, a new technology that claims to allow people to create video game worlds. Billions of dollars of market cap were wiped out in a single day, and not just Take-Two, but also for companies like Unity and Roblox.
Take-Two boss Strauss Zelnick has now reacted to the drawdown, saying bluntly, “I have to admit, I’m a little confused.” Zelnick made these remarks during the company’s latest earnings briefing, seemingly referencing how experts believe Wall Street has lost the plot yet again and do not fully understand how video games are actually made.
“The video game business since its inception was built on the back of machine learning and artificial intelligence. We create our games in computers with technology. And ever since questions began about generative AI about 18 months ago, I’ve been incredibly enthusiastic about what the future can bring,” Zelnick said.
The executive added that Take-Two is “actively embracing generative AI” today and already has “hundreds of pilots and implementations” across the company, including at its development studios. Generative AI was not used to develop content for GTA 6, but Take-Two’s teams are using it to handle “mundane” tasks so its workforce can focus more on creative endeavors.
“We are seeing opportunities to drive efficiencies, reduce costs, and create the opportunity to do what digital technology has always allowed, which is the mundane tasks become easier and less relevant, which frees up our creators to do the more interesting tasks of making superb entertainment,” he said.
Zelnick added that people in the interactive entertainment business have always used the newest technologies to make “amazing things,” and generative AI is no different.
“Our strategy has three parts: Be the most creative, be the most innovative, and be the most efficient company in the entertainment business. And generative AI squarely falls within the category of innovation and is already moving into the category of efficiency,” he said. “I’m hopeful that it will also move into the category of creativity as it allows our creators to use digital tools to expand what we do to make it even more beautiful and even more engaging and even more exciting.”
In an interview with The Game Business, Zelnick share more thoughts, saying he was “surprised about the market reaction” to Project Genie in part because the executive has been optimistic about generative AI technologies for years now.
“The innovations surrounding AI is definitely driving efficiencies, and we think also can drive creativity. Because as tools get better, our teams can do cooler and cooler things,” he said. “I am even more optimistic than I’ve ever been. And I thought the [Google] release was a great sign of things to come.”
Another Take-Two executive, Karl Slatoff, said Project Genie is “early in its iteration” and should not be thought of as a game engine. “They’re not even in the same ballpark. Genie is not a game engine,” he said. “It certainly doesn’t replace the creative process.”
He added: “It looks to me more like a procedurally generated interactive video at this point. There are limitations and Google has said as much. So to compare the technologies, I think there’s really no way to do that because they’re so far apart.”
Slatoff also pointed out that the game development process has so many additional layers beyond creating a virtual world, and Genie does not do these things in its current form.
“There’s the storyline, there’s emotional connection, there’s vibe, there’s mission structure. All of those things you cannot capture through AI and certainly not through a world builder,” Slatoff said. “So that’s just a very, very small component of what we do. And if this tool bears out, it will make a component of what we do all that much better and more efficient.”
While Zelnick and Slatoff are optimistic about generative AI, Zelnick specifically has said people are largely overstating what it can do. No one will be able to prompt an AI technology with, “Please develop the competitor to Grand Theft Auto that’s better than Grand Theft Auto” and have it deliver something good, he said. Humans will always be needed to make compelling art, and tools like AI may exist to help them, but never to replace human creativity completely, the CEO said.
A recent survey of game developers found that more than 50% of surveyed developers said they believe generative AI is a threat to the video game industry. More than 35% said they were already using generative AI in their processes.
Some have said advancements to AI systems could lead to job losses, and many agree this could happen in the short term, but some claim overall employment will increase over time as it has in other industries when automation has come into the mix.
