AI Could Boost Game Profits

Morgan Stanley says artificial intelligence could cut video-game development costs by nearly half and unlock about $22 billion in annual profit. (reuters.com) Reuters reported on April 22 that Morgan Stanley tied the estimate to tools that can automate environment building, dialogue generation and software testing. The note said the gains would accrue to game makers worldwide. (reuters.com) The math lands in a business that Newzoo estimated at $188.9 billion in 2025 in its September market report. A $22 billion lift would equal roughly 12% of that 2025 market size. (newzoo.com) Studios have spent the past two years trying to lower risk after layoffs and rising production budgets hit the business. The Game Developers Conference’s 2025 industry survey said 11% of developers reported being laid off in the prior year. (gdconf.com) Game companies are already telling investors that generative artificial intelligence is part of their production plans. Ubisoft’s 2024-25 annual report said its studios were exploring generative artificial intelligence as part of work on new technologies. (staticctf.ubisoft.com) The practical appeal is straightforward: use software to draft art, write placeholder dialogue, test quests and catch bugs before large teams spend months on the same work. Morgan Stanley’s estimate assumes those time savings become lower labor costs and shorter production cycles. (reuters.com) The push has also produced new rules around disclosure. Valve said developers releasing games on Steam must describe how generative artificial intelligence was used in development or inside the product, and that disclosure can appear on the game’s store page. (steamcommunity.com) Labor groups have pushed for limits as studios expand those tools. SAG-AFTRA members ratified a new Interactive Media Agreement in July 2025 after a strike centered in part on artificial intelligence protections for voice actors and performance-capture performers. (gamedeveloper.com) Developers themselves are split on the technology. The 2025 State of the Game Industry survey said more studios were adopting generative artificial intelligence even as the tools were becoming less popular with many developers. (gdconf.com) For publishers, the near-term question is less whether artificial intelligence can make a game and more where it can shave weeks or months off production. Morgan Stanley’s $22 billion figure turns that question into an earnings one. (reuters.com)