Generative AI is going to result in a hell of a lot of layoffs and will likely ruin people’s lives.

It’s arguably already ruining many artists’ lives, yeah. I haven’t seen any confirmed mass layoffs in the game industry due to AI just yet. Some articles claimed that Rayark, developer of Deemo and Cytus, fired many of its artists, but they later denied this.

AI is going to revolutionize the game industry.

Maybe. If you’re talking AI in general, it’s already been doing so for a long time. Generative AI? Not more so than most other industries, and that’s less than you’d expect.

AI is going to kill the game industry as it currently exists

I doubt such dramatic statements will turn true in time, unless you’re very generous with how openly they can be interpreted.

Generative AI will lead to a lot of real-time effects and mechanics that are currently impossible, like endless quests that don’t feel hollow, realistic procedural generation that can convincingly create everything from random clutter to entire galaxies, true photorealistic graphics (look up gaussian splatting, it’s pretty cool), convincing real-time art filters (imagine a 3d game that looks like an animated Van Gogh painting), and so on.

There’s a bit to unpack, here.

• With better hardware and more efficient models, I can see more generative AI being used for effects and mechanics, but I don’t think we’re seeing revolutionary uses anytime soon.
• While time could change this, model generation doesn’t seem too promising compared to just paying good 3D artists. That said, they don’t need to be perfect, good enough models would already be game (ha ha) changing.
• Endless quests that don’t feel hollow… might be entirely beyond current generative AI technologies. Depends on what you mean by hollow.

Generative AI will eventually open the door to small groups of devs being able to compete with AAA releases on all metrics.

That’s quite the bold statement. On some aspects, I’d be willing to hear you out, but on all metrics? That’s no longer a problem of mere technology or scale, it’s a matter of how many resources each one has available. Some gaps cannot be bridged, even by miraculous tech. For example, indies do not have the budget to license expensive actors (e.g. Call of Duty, Cyberpunk 2077), brands (e.g. racing games), and so on. GenAI will not change this. Hell, GenAI will certainly not pay for global advertising.

Generative AI will make studios with thousands of employees obsolete. This is a double-edged sword. Fewer employees means fewer ideas; but on the other side, you get a more accurate vision of what the director originally intended. Fewer employees also will also mean that you will likely have to be a genuinely creative person to get ahead, instead of someone who knows how to use Maya or Photoshop but is otherwise creatively bankrupt. Your contribution matters far more in a studio of <50 than it does in a studio of >5,000; as such, your creative skill will matter more.

Whoa, whoa, slow down, please.

Generative AI will make studios with thousands of employees obsolete.

Generative AI is failing to deliver significant gains to most industries. This article does a wonderful job of showing that GenAI is actually quite limited in its applications, and its benefits much smaller than a lot of people think. More importantly, it highlights how the market itself is widely starting to grasp this.

Fewer employees means fewer ideas; but on the other side, you get a more accurate vision of what the director originally intended.

Game development can’t be simplified like this! Famously, the designers and artists for genre-defining game Dark Souls were given a lot of freedom in production at the request of director Hidetaka Miyazaki himself. Regardless of what you think of the results, including the diversity of other’s visions… was the director’s vision!

Fewer employees also will also mean that you will likely have to be a genuinely creative person to get ahead, instead of someone who knows how to use Maya or Photoshop but is otherwise creatively bankrupt. Your contribution matters far more in a studio of <50 than it does in a studio of >5,000; as such, your creative skill will matter more.

Again, that’s assuming a lot and simplifying too much. I know companies that reduced their employee count, where what happened instead is that those capable of playing office politics remained, while workers who just diligently did their part got the boot. I’m not saying that’s what always happens! But none of us can accurately predict exactly how large organizations will behave solely based on employee count.

A lot of people will have to be retrained because they will no longer be creative enough to make a living off of making games.

I admit, this is just a nitpick, but I don’t like the way this is phrased. Designers still have their wisdom, artists are still creative, workers remain skilled. If hiring them is no longer advantageous due to financial incentives to adopt AI, that’s not their fault for being insufficiently creative.