Video Game Companies Love AI. Not Everyone Feels the Same

Video game companies embrace AI nearly universally. However, embracing or even loving something does not equate to acceptance.

The State of AI Use in the Industry

Japanese game companies like using AI for backend process enhancements – quite widely, in fact. Developers are not as vocal about AI use. Front-facing aspects of games – world design, game art directions, and background assets – are not made or promoted as much. Primarily that is because of fan backlash to overt AI use. Western game companies appear supportive of AI use, especially on the backend, but individual Western game developers (the employees and workers) are not supportive generally of AI use in games.

Let’s dive deeper into why.

AI Adoption is Universal. AI Sentiment is Regional

The steady drumbeat of AI adoption in gaming is growing louder. Japanese online game companies report 100% generative-AI adoption while a majority of Western developers say gen AI is harming the industry. The numbers tell an intriguing story. In Japan’s surveys, companies are all in for AI. AI adoption is business-driven. But for individual workers? They are a lot less fond of the new technology. Potential layoffs and perceived reduced creativity are some influencing factors.

This highlights a single underlying thread of AI adoption: adoption does not mean acceptance.

AI Tool Use Breakdown

The JOGA report is where this is best documented. The Japan Online Game Association and Kadokawa ASCII Laboratories published the JOGA Online Game Market Research Report 2026 on July 10. This is an annual survey started back in 2004. The survey provides insights into the state of the Japanese online game market and corporate trends among Japanese developers.

A Famitsu preview of the report detailed generative-AI adoption among surveyed Japanese companies at 100%. The tool breakdown was as follows:

• Google Gemini (94%)
• Anthropic’s Claude (84%)
• GitHub Copilot (76%)

Companies used AI for user behavior prediction, marketing, and user engagement. Usage is for process improvement and player engagement. The goal is customization at the individual player level.

What were the report’s year-over-year changes? Last year, a majority of survey participants used OpenAI’s ChatGPT. Also, content planning and user analysis topped the list of uses. Gamer concerns included potential copyright infringement and the proliferation of lookalike games.

Evidence supports AI retaining and increasing staying power. Companies will continue to increase AI usage – whether they disclose AI use or not.

A separate industry report corroborates this trend. In Fall 2025, the CESA Video Game Industry Report shared that 51% of Japanese game companies use AI in development. 32% of game companies use AI to develop in-house game engines.

The Western AI Backlash

To those who do not like AI in video games: AI has been in games for a while. Some would argue companies used some form of AI since gaming’s early days.

The outcry, however, is due to the overtness of generative AI. This makes it a more recent phenomenon and appears more Western-centric.

Here are a few recent Western examples:

Case 1) Clair Obscur: Expedition 33‘s disqualification from the Indie Game Awards earlier this year for trying out AI-generated textures prior to the game’s release. Clair Obscur was one of the most notable cases where backlash to undisclosed genAI resulted in direct and swift consequences. The developer Sandfall Interactive adopted AI use. But the backlash showed that even if a company “mistakenly” uses generative AI or gets rid of it before the game’s release, criticism may follow.

Case 2) Ironmouse, a popular VTuber, canceled a sponsorship with the gacha game Neverness to Everness (NTE) in May 2026. Ironmouse’s team inquired about AI use before proceeding with the sponsorship deal. The game’s developers said there was no AI used in the game. Gamers caught on to generative AI use in in-game assets akin to extant anime. Notably, in-game art, background, and environment assets. Ironmouse plus several other creatives stopped working with the developer and promoting the game.

Case 3) Crimson Desert AI Art controversy: Fans and game developers united to discredit this one. Pearl Abyss, the game developer, said gen AI tools were used early in the process to rapidly test out visuals. Gen AI inclusion in the final release was completely unintentional. This one right here was especially interesting since placeholder AI art assets used during development remained in the game upon release. Here the developer publicly said it was accidental.

The big ruh-roh is that AI usage disclosure is required by Valve for games published on Steam. An in-game asset audit and effort to patch out any other AI-generated textures ensued.

Japan’s Embrace of AI

Here are the Japanese examples of companies adopting AI:

Case 1) Square Enix has been pursuing a joint research project with the University of Tokyo’s lab to automate 70% of QA and debugging tasks in game development by 2027. The project’s goal is to improve efficiency and beat out the competition.

Case 2) Sony / PlayStation shared information about its internal tool called Mockingbird that converts performance-capture data into 3D facial animation. This work once took hours. Now the job gets done in a fraction of a second. Naughty Dog is one of the studios using the tool.

Case 3) Cygames launched Cygames AI Studio. The unit focuses exclusively on building generative AI tools for creators. Fans did not take kindly to this development, especially the Umamusume: Pretty Derby and Granblue Fantasy communities. Ultimately, Cygames announced it would give advanced notice when generative AI is coming to a game.

A common theme threads through all three examples: AI is for backend work. Frontend work like creative assets is a no-go for AI use in Japanese companies.

What Does This Mean for Gaming Culture Going Forward?

The trajectory of gaming culture won’t change. How people interact with video games and vice versa will deepen and evolve. This will occur in Japan and the West. Right now, Japanese game companies seem more open about their AI usage than Western companies. In the West, reports suggest sales and positive reception dipped noticeably when game makers disclose their AI use. Therefore, companies have been prone to hide their AI use. We have not seen an unleashing of a vast improvement in game quality, reduction in development time, or price drops. Until at least two of these things happen, the games industry will continue to see AI controversy every now and then.

Still, the drumbeat of AI usage will continue. Those companies who get caught using generative AI may court gamer complaints.

Past is prelude.

Eventually, over two or three console generations, people will grow accustomed to AI in video games. The next generation of gamers will likely seek out the latest AI-enhanced gaming experiences. Then they will complain if those features are not included in their favorite games. Review scores will take a hit. Sales will dive. That is the future.

Here is a quote from Junghun Lee, Nexon’s CEO, once criticized by the industry developers writ large, which embodies the current landscape: “Assume every game company is now using AI.”

That is a very safe assumption. And the West is catching up to what Japan already does.

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