Google's World Model Sounds the Alarm on "Stealing Jobs" - US Stock Gaming Sector Faces Panic Selling

Due to Google DeepMind launching Project Genie, the market is concerned that this artificial intelligence (AI) tool may disrupt the gaming industry, leading to a collective decline in Unity and several other gaming companies.

As of the close of U.S. stocks on Friday (January 30), virtual engine development company Unity Software fell 24.22%, the largest single-day drop since 2022; GTA developer Take-Two Interactive dropped 7.93%, the metaverse community Roblox declined 13.17%; mobile technology company AppLovin fell 16.89%.

William Blair analyst Dylan Becker wrote in a report to clients: “This price reaction further proves that, amid AI uncertainty, market sentiment is showing a ‘shoot first, ask questions later’ panic, which has been suppressing the entire software sector for the past few months.”

Previously, Caixin reported that Google DeepMind opened Project Genie to the public on Friday, which is considered one of the most advanced world models currently available. It can be regarded as an experimental research prototype of the world model Genie3, and this is the first time this world model has been made accessible to the public in an interactive form.

Unlike large content generation models like OpenAI’s Sora, Genie3’s capabilities are not limited to multimodal content creation. Instead, it can generate a complete space, enabling “world creation from nothing.”

Some analysts believe that such tools could fundamentally change the way video games are developed, a view that has caused a sharp decline in gaming stocks. Similarly, the SaaS (Software as a Service) sector also experienced a sell-off due to concerns over the capabilities of Anthropic’s Claude tool.

However, Wall Street analysts generally remain optimistic, with some viewing this as a buying opportunity for investors to acquire Unity at a lower price.

Evercore ISI analyst Robert Coolbrith commented on the AppLovin report: “We believe that today’s movement in gaming stocks largely ignores the importance of creativity in open-world games and the social/network effects.”

Becker stated that the market is worried that Google’s platform might erode Unity’s market share (about 70% of the top 1000 mobile games worldwide use Unity tools), but this concern overlooks the fact that the Unity platform has also integrated similar AI capabilities. Such worries are “exaggerated.”

Analyst Nathan Naidu pointed out that Google’s AI tool “is unlikely to threaten EA, Take-Two, Roblox, and Unity in the short term,” but he also warned that if it evolves into a platform capable of producing commercialized games, it could pose a long-term risk.

(Source: Caixin)