The video games industry may be heading toward another technological reset, driven not by new consoles or graphics chips, but by artificial intelligence models that can generate entire interactive worlds. Known as “world models,” these systems aim to simulate physical spaces in three dimensions, allowing environments to be created, explored and altered dynamically rather than painstakingly built by hand, the Financial Times reported.
Companies at the forefront of this push include Google DeepMind and World Labs, a start-up founded by AI researcher Fei-Fei Li. Their argument is that games, more than many other industries, are a natural early home for this technology.
What are ‘world models’?
World models are AI systems trained to understand and recreate how environments behave. Instead of generating a single image or character, they can produce navigable 3D spaces that respond to movement, physics and player actions.
In gaming terms, this means landscapes, cities or interiors could be generated from text prompts and then explored like traditional game levels. Developers say this could dramatically reduce the time and cost involved in building large, detailed worlds.
Shlomi Fruchter, who co-leads DeepMind’s Genie 3 project, has said that game creation is already changing and may be transformed entirely over the next few years. Rather than replacing existing games, he argues, world models could expand the kinds of experiences developers and players can create.
Why games are the first target
The games industry is expected to generate close to $190 billion in revenue this year, making it one of the largest entertainment sectors globally. It is also highly dependent on digital assets—maps, characters, environments—that take years and enormous budgets to produce.
Some studios are already using AI tools to generate visual assets or speed up development. At Game Gears, part of the GDEV group, executives say AI has significantly accelerated the production of titles like Aliens vs Zombies: Invasion. Epic Games, meanwhile, recently introduced an AI-powered version of Darth Vader as an interactive character in Fortnite.
World models are pitched as the next step: not just helping artists, but reshaping how games are built from the ground up.
A challenge to game engines
Fei-Fei Li has suggested that world models could disrupt established game engines such as Unity and Epic’s Unreal Engine. If environments can be generated and modified through AI systems rather than traditional tools, the role of these engines—and the skills needed to use them—could change significantly.
Several AI companies are moving quickly. World Labs recently launched a model called Marble. Runway, which already works with creative studios, released its first world model late last year. The pace of experimentation suggests a race to make the technology practical enough for real-world production.
More power for players, less friction for developers
Proponents argue that world models could put creative power directly into players’ hands. Instead of choosing from pre-built levels, players might generate personalised worlds on the fly. For developers, the appeal lies in reducing reliance on expensive software and specialised teams for early-stage design.
Supporters also say the technology could ease burnout in an industry where so-called triple-A games can take many years to make and cost upwards of $1 billion. Faster iteration, they argue, could give teams time to experiment, polish ideas and take creative risks that tight production schedules often eliminate.
Fears of job losses and ‘AI slop’
Not everyone is convinced. Critics warn that wider use of AI could displace artists, designers and junior developers, particularly if studios use it to cut costs. Six European video game unions recently condemned the growing use of AI tools, arguing they are being imposed in ways that worsen working conditions and undermine creative labour.
There is also concern that games could be flooded with low-quality, generic AI-generated content, diluting artistic identity rather than enhancing it.
An industry at a crossroads
For now, world models remain an emerging technology rather than a finished solution. But their arrival highlights a familiar tension in gaming: between efficiency and craftsmanship, speed and originality.
Whether world models become a foundation of future games or remain a niche tool will depend on how studios choose to deploy them—and how much trust developers and players place in AI to shape the worlds they inhabit on screen.
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