AI Revolution in the Gaming Industry: Creativity Under Siege and the Fight for Jobs

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AI's Impact on Employment in the Gaming Sector Becomes Evident

Upon opening the email, Noah was struck by a surge of worry. It was during the spring of 2023 when the Activision illustrator came across a note from Michael Vance, the firm's chief technology officer at the time, discussing the significant consideration being given to artificial intelligence within the video game company. Vance mentioned that although the systems were in the preliminary phases of assessment, the initial results were highly promising.

Several emails of this nature had been dispatched to the workforce of the studio behind the powerhouse Call of Duty franchise. An earlier message had greenlit the in-house application of generative AI technologies, Midjourney and Stable Diffusion, for the creation of concept artwork.

During that spring, informal conversations were buzzing with speculation, concern, and secretive exchanges about the potential of AI to substitute human jobs. While higher-ups viewed this development with optimism, a significant number of game creators, including artists, writers, and designers, perceived it as an imminent danger to their careers. Noah was devastated. (Noah is a fictional name given to protect the identity of the employee who wishes to remain anonymous due to concerns over possible backlash.)

"He expressed his concern that we were discarding our human essence."

Subsequently, employment opportunities began to vanish.

The video game sector, along with its creators, is facing significant challenges. In 2023, it's estimated that around 10,500 workers in this field were let go. The situation has only deteriorated throughout the year in this industry, valued at almost $200 billion, with the number of job cuts reportedly increasing to 11,000 and possibly more. Microsoft, the corporation behind Xbox and the overseer of various development studios including Activision Blizzard, closed down Tango Gameworks and Alpha Dog Games in May. Meanwhile, generative AI technologies developed by OpenAI and similar companies are making their way into almost all sectors, disrupting numerous professions in the process.

Yet, the gaming sector could become the most significant domain for artificial intelligence (AI) to dominate. This industry's financial power has surpassed that of Hollywood for some time now, and it predominantly operates without unionized labor. A survey conducted by the Game Developers Conference organizers revealed that nearly half (49%) of the over 3,000 participants reported their companies incorporate AI. Furthermore, 80% of these respondents expressed ethical reservations about how AI is utilized.

"Without a doubt, it has arrived," declares Violet, an experienced game developer and technical artist with more than ten years of experience working on major titles. "I believe it's become evident to all how it's being utilized, it's just a question of the methods and extent. The secret is out, the box has been unlocked."

Newly uncovered emails shared with WIRED, alongside conversations with various contributors from the gaming sector including artists, programmers, designers, and employees from both large-scale AAA studios and small independent teams, reveal an industry already on shaky ground now facing increased pressure due to the advancement of AI.

The process of automating jobs is seldom uniform or straightforward. Over the years, its effects are often experienced in the form of deskilling, where machines or software take over more tasks, or through attrition, where workers who are dismissed, resign, or retire are not rehired or replaced. Generative AI appears to follow this same trend, according to all signs.

Leaders within the gaming industry are not always deploying artificial intelligence with the aim of completely dissolving teams, but rather, many are incorporating it as a strategy to streamline operations, enhance efficiency, and make up for the workforce shortfall resulting from job cuts. Essentially, executives are indeed substitifying and diminishing roles through the use of AI. However, this transformation doesn't always manifest in ways one might expect. The process is intricate, driven by decisions from upper management that are not always transparent, and its ultimate outcome remains uncertain. The situation is less about a dystopian AI takeover and more about a significant shift in how work is done—an alteration that's unfolding at this moment.

"Artists from various fields are experiencing significant stress due to AI," notes Molly Warner, who was employed as an environment artist on an Overwatch title at Blizzard Entertainment, a sister company of Activision, when the Chief Technology Officer's emails were distributed. "Almost all of my colleagues are strongly opposed to the integration of images produced by AI."

The level of concern increased with the ongoing flow of emails from Vance about enhancing AI. In May 2023, during a meeting that involved the entire company, Bobby Kotick, who was the CEO of Activision Blizzard at the time, addressed an inquiry regarding the effect of generative AI on the video game sector.

"He mentioned that he has been acquainted with Sam Altman and the team at OpenAI for quite some time," as per a recording accessed by Kotaku. "It might not be widely recognized, but the inception of contemporary AI technologies, including ChatGPT, was primarily aimed at mastering various games, be it Warcraft, Dota, Starcraft, Go, or Chess." Kotick elaborated: "Something that has struck me in the past year is the reminiscent sensation I had when I first encountered the Macintosh, regarding the significant influence AI is poised to have on society, encompassing both its advantages and disadvantages."

By the time July rolled around, the company's original caution had diminished. In a subsequent internal communication, Vance revealed that Activision had obtained rights to GPT-3.5 and greenlighted the employment of specific generative AI technologies for the production of conceptual art and promotional content. Additionally, the company planned to utilize AI for various external applications, such as generating customer surveys.

Despite the discomfort and fear for their economic security shared by numerous game developers and artists regarding this expansion, only a handful raised their voices. "The reason we mostly kept silent was the worry over job security," Noah explains. He mentions that Activision had given its assurance to the artists that generative AI would solely be employed for creating initial concepts internally and not for the production of final game materials, with a significant promise that AI would not serve as a substitute for their roles.

As the year drew to a close, Activision introduced a cosmetic item created using artificial intelligence for sale in the Call of Duty: Modern Warfare 3 shop. Towards the end of January, Microsoft announced the termination of 1,900 employees from Activision Blizzard and Xbox, with the layoffs significantly affecting 2D artists.

"Such a terrible day," former Blizzard environment artist Lucas Annunziata shared on X. "A significant portion of the environment art team for [Overwatch 2] was laid off, including people I personally recruited and mentored."

At Activision, the scenario was similar. Noah mentions, "A significant number of 2D artists found themselves jobless." The department experienced substantial cuts. He asserts that the "surviving concept artists were compelled to incorporate AI tools into their creative process." According to Noah, staff members were required to participate in AI training programs, and the adoption of AI technology is being encouraged across the company.

"According to Violet, who preferred to remain anonymous due to concerns about backlash, AI is reshaping various sectors of the industry by replacing traditional roles. She explains, 'Instead of hiring numerous costly concept artists or designers, you can simply have an art director issue some vague instructions to an AI, which can produce satisfactory results quickly. Then, just a handful of artists are needed to refine the output.'"

Thus, the prevailing agreement suggests that AI has notably affected concept artists, graphic designers, asset creators, and illustrators the most. This is supported by firsthand stories from individuals in the gaming industry, those who have lost their jobs, and numerous discussions on platforms like Reddit, X, and others.

Generative AI has shown proficiency in creating 2D images which some managers in budget-restricted studios deem as "sufficiently acceptable," a phrase now commonly used by those monitoring AI in the creative industry. This phrase signifies AI-generated content that may not rival exceptional artwork but does pose a risk to the jobs of creative professionals. After all, there are clients who prioritize budget over quality. For the time being, tasks such as 3D animation and coding remain significantly more challenging to fully automate.

For many years, video games have incorporated automated elements to some extent. They often utilize artificial intelligence or "AI" to manage adversaries, game settings, and characters not controlled by players. However, the current conversations around AI have shifted focus. As of 2024, the discussion predominantly centers on the generative AI created by expansive language models (LLMs) and the associated technologies that have emerged from the recent surge in interest.

A new study conducted by CVL Economics on behalf of entertainment sector trade associations has revealed that the video game industry has been quicker to adopt generative AI technology compared to the television, film, or music industries. The research, which involved surveys from 300 CEOs, executives, and managers, indicated that almost 90 percent of these gaming firms have already integrated generative AI applications into their operations.

According to CVL's findings, gaming significantly leans on Generative AI (GenAI) more than any other sector in the entertainment industry, utilizing it for creating storyboards, designing characters, rendering, and animating. Predictions suggest that GenAI could account for over 50% of the video game creation workflow within the next five to ten years.

For many employees within the gaming industry, it can be challenging to grasp the full scope of operations within a large gaming corporation such as Activision Blizzard, which is composed of an intricate network including various studios, developers, external partners, and quality assurance (QA) personnel. A smaller studio might operate under the umbrella of a larger entity, with its responsibilities including the development or co-development of a specific game for the overarching company. "The structure within AAA gaming is quite segmented, making it difficult to track who is responsible for what," Violet mentions. "The use of AI might be widespread, but pinpointing its application in specific areas is nearly impossible." (Attempts to get a response from Activision Blizzard regarding this matter were unsuccessful.)

The unclear circumstances surrounding the application of AI in various games appear to have simplified the process of overlooking copyright issues. "It feels like uncharted territory," Violet comments. "In discussions at various firms, there's a moment where they consider the legality of their actions," yet they proceed with integrating AI regardless.

American legislation mandates that for a work to be eligible for copyright, it must be created by a person. This requirement causes concern for entities such as film studios. However, it remains unclear if training artificial intelligence systems with copyrighted material without permission breaches copyright laws. Furthermore, when AI-generated works are produced following human instructions, legal decisions have generally not favored granting them copyright protection. Identifying copyright infringement becomes particularly challenging with materials like concept art, character descriptions, or programming that isn't included in the final product. According to Violet, the question then becomes, "How can you demonstrate that this constitutes a violation of copyright?"

Doubts surrounding copyright issues, worries regarding the safety of large language models, and apprehensions among employees about losing their jobs have caused a split within the sector.

"Essentially, there are two distinct viewpoints," explains Karla Ortiz, an industry artist, "there are those enterprises that are completely against it, and then there are those who view it as an opportunity to reduce labor expenses." (Ortiz is also involved as a plaintiff in a collective legal action for copyright infringement against Stability AI, DeviantArt, and Midjourney.)

Ortiz highlights that certain studios have nearly prohibited the use of generative AI. Various informants have pointed out that Blizzard, in contrast to its partner studio Activision, forbids developers from utilizing publicly accessible AI generators, despite working on its proprietary AI technologies. Conversely, some firms are adopting them with open arms. Dan Beglov, who works as a narrative designer for Sensorium and Team Gramps, shares, “There's a noticeable enthusiasm among upper management for incorporating AI into our work,” he observes. “However, it's clear that this move has been met with some resistance from those within the gaming industry.”

In a recent earnings discussion last May, Electronic Arts (EA)’s chief executive, Andrew Wilson, expressed concerns about the potential impact of technological advancements on employment. He pointed out that historically, significant shifts such as the agricultural and industrial revolutions have initially led to job losses, but eventually resulted in the creation of more employment opportunities. Wilson conveyed his optimism that artificial intelligence (AI) would follow a similar pattern, offering new opportunities in the long run. However, by February 2024, EA announced a reduction of its staff by 5 percent.

In 2023, Riot Games, known for its highly popular League of Legends franchise, conducted a company-wide meeting focused on artificial intelligence with the members of its creative team. Rachael Cross, a concept artist employed by Riot Games during this period, described the atmosphere as somewhat tense. She recalled company executives emphasizing that there were no plans to substitute AI for human talent, acknowledging the indispensable role of their artists in upholding the company's brand value through their artwork.

During his annual corporate address in January, Tencent's CEO Pony Ma, who oversees Riot Games' parent company, emphasized that the firm should concentrate on incorporating its unique Hunyuan AI technology across various operational areas to enhance productivity, according to Reuters.

In the week preceding Ma's remarks, Riot Games dismissed 530 workers, Cross among them. Cross doesn't believe their position was directly substituted by artificial intelligence. "However, it's quite ironic that many of us, who were involved in major flagship events, were among those let go," they noted.

The decline in employment within the video game sector wasn't solely compensated for by the introduction of AI technologies by corporate leaders. At the onset of the Covid-19 pandemic, numerous game development studios aggressively expanded their workforce, only to find they had expanded too quickly. Additionally, the industry saw significant consolidation, exemplified by Microsoft's acquisition of Activision Blizzard for an unprecedented $69 billion last October, which led to job cuts afterwards. (Following Microsoft's takeover, Kotick resigned, and Natalya Tatarchuk was appointed as the new CTO, replacing Vance.) Similarly, like many leading tech firms, several companies in the gaming world have increasingly turned to outsourcing and employing contractors.

Shortly after being dismissed from Riot, where Cross was involved in designing character skins for League of Legends, they claim to have been contacted by a firm that provides art services to game developers. This firm inquired about Cross's availability to design skins, specifically for a variant of League of Legends, offering a set fee for each skin produced.

"Cross believes that AI represents a significant issue, yet it's indicative of a broader problem. According to them, art in video games is not given its due importance, and like numerous other professions, there's a pervasive trend towards minimizing costs at all costs, frequently involving the outsourcing of jobs overseas."

Noah, an employee at Activision, mentioned that the company has begun to heavily rely on external sources for the majority of their 3D art assets. He attributes this shift to the inability of the in-house art team to meet demands following staff reductions. Furthermore, Noah notes that some of the contracted artists are incorporating art created by artificial intelligence into their work.

Firms located abroad, especially in China, are also feeling the pressure from artificial intelligence. Leo Li, a recruiter within the gaming sector from Hangzhou, shared with Rest of World that there has been a significant reduction, approximately 70 percent, in illustrator positions within his nation, partially attributed to the easy access to AI creation technologies.

In Japan, the startup Crypko AI offers AI-created character illustrations. Bloomberg reports that while outsourcing such illustrations typically costs over ¥100,000 per piece, Crypko provides them for a monthly subscription of ¥4,980, plus ¥980 per image for a commercial license. This amounts to a comparison of $692 for a single illustration created by a human artist versus $34 monthly for unlimited access to AI-generated images. Although a human artist is required to refine these AI-generated images, their fee is considerably lower than hiring a full-time illustrator or commissioning a bespoke design.

In the meantime, the advantage that AI technologies provide to those in managerial positions, serving as a rationale for workforce reductions, can be as significant as the technology's capabilities. Warner notes that the roles of several of her acquaintances and professional connections shifted towards training AI in image recognition or cleaning up AI-generated images in the past year—only for them to be subsequently dismissed from their positions. Currently, she points out, it has become quite usual to encounter vacancies for concept art roles that demand the utilization of generative AI by candidates.

In a widely shared instance, Treyarch, a game development studio located in Southern California known for its contributions to Activision's Call of Duty series, advertised an opening for a “2D Artist Animator.” At the top of the list under the “To succeed you should have …” segment, the posting highlighted a requirement for “outstanding abilities and knowledge in digital sketching, drawing, and painting, along with sophisticated proficiency in using AI-driven creation tools like Stable Diffusion, Vizcom, Dall-E, or similar technologies.” This demand was met with significant backlash from the artist community.

Many individuals working in the gaming industry express appreciation for the growing curiosity in unionization, sparked by artificial intelligence. "AI is certainly driving the push for organization among workers," Beglov remarked during a panel discussion on the subject at the current year's Game Developers Conference (GDC). He emphasized the importance of using AI only with the approval and input of the workforce. According to a survey conducted by the GDC, 57% of game developers showed favor toward the idea of forming unions.

Chrissy Fellmeth, a representative for the International Alliance of Theatrical Stage Employees (IATSE), alongside Beglov, highlighted the strides made by Hollywood scriptwriters in establishing safeguards against the deployment of AI in their agreements with the leading television and film production companies. Currently, there is a significant lack of agreement or approval from video game creators regarding the circumstances under which AI technology can be implemented by their supervisors; adopting a similar arrangement to that of the Writers Guild of America could potentially alter this dynamic. "The decision to employ AI technology rests with the writers, not the production houses," Fellmeth noted. "Aiming for such a standard could be immensely beneficial for individuals in the gaming industry."

Another consideration for management regarding the generative AI tools they're using is their effectiveness and reliability, which might not meet expectations. The internet is awash with examples of companies that have leaped too far into AI adoption, encountering limitations. Lauren Lehmann, an animation director at Terrible Posture Games, pointed out that while AI can create images of guns and robots, it struggles with conceptual transformations, such as a gun morphing into a robot, a task even humans find challenging. Lehmann shared experiences where initial attempts to integrate AI into creative processes showed promise but quickly fell apart upon deeper engagement. "The moment we acknowledged a decent beginning, the system essentially failed," Lehmann observed.

However, there's a concern that the push for reducing costs could overshadow the importance of maintaining quality, especially initially. "In my view, the upcoming year or two will be tough for many," Ortiz notes, especially for those just starting out who depend on commission-based jobs for both experience and financial stability. "I anticipate a significant upheaval from businesses that settle for what they consider 'sufficiently good.'"

However, certain video game enterprises are pushing the envelope by focusing on a model that not only involves AI but is nearly entirely driven by it. Consider Braindump, a company that identifies itself as an AI game developer, with a mission "to equip you with a complete AI-powered game studio, including programmers, designers, and more, to assist in bringing your ideal game to life." It pledges to enable users to construct comprehensive games and immersive environments from a top-down perspective "just by entering commands."

At the same time, companies such as Activision Blizzard and Riot are creating proprietary systems internally, with mixed results.

"Cross mentions that Riot was in the process of developing a unique generative AI intended solely for internal use, yet it failed to gain significant internal support," he states. Sources familiar with the initiative informed WIRED that it involved collaboration with Vizcom, a startup known for its slogan “Bring your design ideas to life.” However, the project was not off to a smooth start and was met with skepticism by the company's artists.

When contacted by WIRED for a comment on the report, Riot's chief of technology research, Wesley Kerr, indicated that the organization is investigating AI technologies that could enhance the gaming experience in a manner consistent with their principles. He acknowledged the complexity of AI and promised openness with their community regarding their plans. Vizcom, on the other hand, did not reply to a request for a statement.

According to sources, Blizzard Entertainment is also developing its proprietary artificial intelligence technology, previously referred to as Blizzard Diffusion. Information remains limited, except for a patent application for a system dedicated to generating structured 2D images through machine learning. Warner mentions, "Blizzard's own AI, which they've developed, remains highly confidential. It's accessible only to a select few within the company, leaving the rest in the dark about its functionalities."

Ortiz is concerned that a highly sophisticated internal model could potentially decrease the demand for ongoing employment, favoring temporary contracts instead of long-term positions. Ortiz has been in search of a full-time position for the past 18 months. She notes that numerous companies in the field prefer to employ her on a project basis, to train their models, with no intention of engaging her services in the future.

Every creative professional, from artists to designers, that WIRED consulted expressed no interest in adopting AI, stating it was imposed on them by their superiors. Many of these individuals courageously voiced their concerns, despite the fear of losing their employment, often speaking with noticeable anxiety.

In the end, the impact of AI on the gaming industry could largely be decided by the people directly involved in game creation, including developers, artists, designers, and programmers. The extent to which automation takes over could hinge on the level of resistance or the demands for oversight on AI implementation by these professionals.

"AI isn't inherently negative," states Violet, an experienced developer in AAA gaming. "The issue arises when profit maximization becomes the primary objective. AI has the potential to be incredibly beneficial in addressing intricate global challenges or performing tasks that are undesirable—especially those that don't result in job displacement."

Update: July 23, 2024, at 11:00 AM EDT: Wired has made a correction to the previously misstated name of Activision Blizzard's former CEO.

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