The video game industry is experiencing one of the most difficult phases in its history, with production costs escalating unprecedentedly and development cycles stretching over many years, consuming vast amounts of time and money. This has brought the traditional business model that sustained the industry for decades to the brink of collapse. Amid these severe challenges, modern technology emerges as a solitary lifeline capable of restoring balance to a market that is tightening even for its largest pioneers.
An unsustainable business model
Jack Buser, global head of gaming at Google Cloud, delivered definitive and pivotal remarks declaring clearly that the current business model in the video game industry is no longer sustainable. He stressed that artificial intelligence represents the only realistic path forward. These remarks came during an interview with GamesIndustry.biz coinciding with the launch of the Google Cloud Next 2026 conference in Las Vegas, USA.
Buser noted that AI tools possess the capability to rescue the industry from its suffocating crisis following years of successive layoffs, canceled projects, and uncontrollably inflated development costs. In his interview, he stated: “The era of investing 5, 7, or even 10 years to develop a single video game costing hundreds of millions of dollars is simply no longer viable.”
He asked with a tone carrying both defiance and hope: “Can we return to a healthier, more sustainable industrial model where we can invest tens of millions into a single game and release it within a few years instead of a full decade?”
Shocking figures reflecting the scale of the crisis
Buser’s comments arrive as the industry faces bitter realities and alarming figures. The State of the Game Industry 2026 report, based on a survey of over 2,300 professionals conducted by the Game Developers Conference (GDC), revealed that 28 percent of game developers worldwide have been laid off over the past two years. This concerning figure rises to 33 percent among workers in the United States.
Official estimates indicate the loss of nearly 45,000 jobs across various sectors of the industry between 2022 and mid-2025. Early indicators suggest that 2026 may witness a wave of layoffs matching the severe losses of 2023, which saw approximately 10,500 layoffs. In this context, Buser viewed AI as an effective tool to address these systemic pressures, noting it will help companies “correct the course of their business models” and restructure to become more efficient.
Studios adopting technology in silence
Buser drew attention to the fact that actual adoption of these technologies is already widespread, though it often occurs quietly and without official announcements. He pointed to a Harris Poll commissioned by Google Cloud, which showed that 90 percent of developers are already using AI tools at some stage of production.
He cited the longstanding Japanese company Capcom, which openly acknowledged using generative AI technologies powered by Google Cloud for playtesting and ideation. AI agents currently operate for over 30,000 hours per month across nearly half a dozen titles developed by the company. Nevertheless, the Japanese company emphasized that it “will not integrate AI-generated assets and resources into the final game content,” confirming that its use is strictly limited to improving workflow efficiency.
The developer’s Iron Man suit
In a striking rhetorical simile, Buser compared equipping developers with AI tools to wearing the famous “Iron Man” suit, which grants humans superhuman abilities. He urged chief technology officers across companies to make this technology available across all departments of their organizations without exception.
He explained that small and independent studios, in particular, will benefit tremendously from this technological revolution, gaining the ability to compete directly and effectively with major publishing companies whose cost structures have become a burden threatening their survival and continuity in the open market.
Ongoing doubts and ethical challenges
Despite this optimistic vision, not everyone shares Buser’s absolute enthusiasm. Google Cloud is known to be a major supplier of AI infrastructure in the gaming sector, giving its executive a clear and direct commercial interest in promoting the broader adoption of these technologies. The high adoption figures conflict with GDC survey results, which found that only 36 percent of developers reported using AI in their actual work.
Furthermore, broad and influential segments of the industry continue to oppose the use of AI tools for ethical reasons, particularly regarding the use of copyrighted material in training databases. Buser himself acknowledged that this radical shift will not pass without pain or casualties, telling Decrypt last year in decisive words: “Some gaming companies will thrive and grow in this new era, while other companies will not survive.”
FAQ
Key questions about the gaming industry crisis and new technology
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Why is the current gaming industry business model unsustainable?
The current model is unsustainable due to exorbitant costs reaching hundreds of millions of dollars per game, and lengthy development periods that can take between 5 to 10 years, placing companies under immense financial pressure.
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How many jobs have recently been lost in the gaming industry?
Estimates indicate the loss of about 45,000 jobs in the video game industry between 2022 and mid-2025, with expectations that 2026 will see layoffs similar to those that occurred in 2023.
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How are companies currently using AI in games without affecting artists’ rights?
Companies like Capcom use AI to improve workflow efficiency, such as running automated playtests and generating ideas, while avoiding the inclusion of AI-generated art assets or graphics in the final game content.
