MENA Newswire, SAN FRANCISCO: Shares of several video game and game technology companies fell sharply on Friday after Google opened access to an artificial intelligence model that can generate interactive, game like worlds from a text or image prompt, a launch that drew investor attention to how generative tools could alter parts of the game creation pipeline.
Google said the new capability is available as an experimental prototype called Project Genie, which lets users create, explore and remix interactive worlds. The company described the system as producing environments that respond in real time as a user moves and interacts, rather than only generating static images or pre rendered scenes.
The market reaction centered on companies tied closely to game engines, user generated content platforms and big budget publishing. Unity Software, whose technology is widely used by developers to build and run games across devices, fell 21%. Roblox, which hosts a large ecosystem of creator built experiences, dropped more than 12%. Take Two Interactive, the publisher behind major franchises including Grand Theft Auto, fell about 10%.
Google’s announcement positioned Project Genie as a research prototype powered by a world model called Genie 3. The company said the tool can sketch a world from text or images, allow a user to navigate it, and then produce new variations from updated prompts. Google also noted the prototype has limitations, including around realism and character control, and described it as a work in progress.
Project Genie and market reaction
Google said access to Project Genie is being provided to Google AI Ultra subscribers in the United States through Google Labs, alongside other experimental features. The company framed the release as part of its broader work on models that can simulate interactive environments, with potential applications across areas that depend on dynamic scenes and movement.
The selloff in game related stocks came during a period when the sector has faced heightened scrutiny over costs and production timelines. Building major titles can require large teams and multi year development cycles, and game engines and creator platforms have become central infrastructure for studios and independent developers alike.
What the tool does and what it does not do
Google described Project Genie as a way to generate interactive environments from prompts, not as a full commercial game engine. The company said the tool is designed to let users explore and remix short, interactive worlds within the prototype, while it continues to improve the underlying technology.
For game industry investors, Friday’s moves underscored how quickly market sentiment can shift when a large technology company releases a new generative model that touches core creative workflows. The declines in Unity, Roblox and Take Two were among the most pronounced reactions, reflecting their visibility in game development tools, creator ecosystems and high profile publishing.
The companies have not disclosed any change in operations tied to Google’s announcement, and Google did not present Project Genie as a replacement for existing engines or full production pipelines. The episode nevertheless showed that new AI releases can ripple across adjacent sectors, with traders reassessing competitive positioning and exposure to evolving software capabilities within hours of a product update.