Google's Project Genie Sparks Gaming Stocks Selloff

31 Jan 2026

Google’s new Project Genie — powered by the Genie 3 world model — prompted noticeable selloffs in gaming stocks a day after its reveal. Take-Two, Roblox, and Unity all fell sharply (Take-Two closed at $220.30, down 7.93%; Roblox closed at $65.76, down 13.17%; Unity closed at $29.10, down 24.22%), according to Reuters cited in the report.



Genie can generate short (60‑second) interactive experiences from text prompts that look like playable worlds, but the current outputs lack scores, objectives, sound, and reliable consistency; they can produce strange errors and you can only download a video of an experience rather than export assets into engines like Unreal or Unity. Google DeepMind says Genie 3 was “trained primarily on publicly available data from the web,” and a white paper on the first Genie model notes training on “a large dataset of over 200,000 hours of publicly available Internet gaming videos.”



Developers and creators remain skeptical — citing training-data concerns, energy and water usage, and the risk of replacing roles like testing and concept work. At the same time, investors and execs are bullish on AI game tools: xAI’s Elon Musk promised “Real-time, high-quality shows and video games at scale, customized to the individual, next year,” Epic’s Tim Sweeney predicted leapfrogging between engine‑centric and world‑model AI, and Meta’s Mark Zuckerberg has promoted AI making games “more immersive and interactive.”