Xbox manager says AI is already used in game development

Xbox recently announced Xbox Labs, a team that is expected to use AI for tasks such as code generation and asset creation, though the announcement stopped short of confirming specific tools. Microsoft, Xbox’s parent, is a major AI developer, and several large publishers—including Capcom, Square Enix, Sega, Nexon and Activision—have either used AI or pledged to do so. In contrast, smaller independent studios like Finji, ConcernedApe and Strange Scaffold publicly oppose the technology.

Industry surveys claim roughly 90 % of developers have adopted AI, but the methodology and definition of "AI" are disputed. Critics warn that AI could enable low‑quality “slop” games and be used to justify workforce cuts, while supporters argue it speeds production and reduces costs. The true impact on game quality and employment remains uncertain.