Try to contain your amazement: Elon Musk has had a terrible idea. The half-trillionaire has taken a break from getting his pet AI—the one that went on a tear and declared itself “MechaHitler” in July—to generate scantily clad anime women to instead muse on its ability to generate a videogame. Musk declared on Monday that his xAI game studio “will release a great AI-generated game before the end of next year”. All of these are true things I just wrote. This is the world they have built for us.

If the notion of the gooner Hitler robot generating your videogames doesn’t sound great to you, you’re in good company: Larian publishing lead and opinionated tweeter Michael Douse was one of the first industry figures to note that maybe Musk doesn’t have quite the same grasp on the games industry as the guy he pays to play Path of Exile 2 for him.

“AI isn’t going to solve the big problem of the industry, which is leadership and vision”, wrote Douse. In Douse’s telling, what the games industry lacks more than anything is coherent vision and direction. That used to be provided by videogame retailers, who set the guardrails for publishers and devs in terms of “quality (lest buyback), price, availability”, and so on.

And then, well, we all stopped going to videogame retailers, didn’t we? “When it crashed the sensible default would be to enjoy cutting out the middleman and connecting directly with audiences in a sort of 1:1 relationship. That did not happen. It became a game of headless chickens racing to the [profit and loss] sheet.” In other words, the industry became dominated by a few very rich companies that don’t really know where they’re going.

“AI isn’t going to solve that”, continued Douse. “Those who will succeed are those who are people building something for people”. Which I agree with and also feel is ol’ Douse tooting Larian’s own horn a little bit. “People building something for people” is a quote you could slap on the back of the Baldur’s Gate 3 box. No one would see it, mind, because of that whole thing about no one going to brick and mortar retailers we talked about earlier.

Genuinely what this industry needs is not more mathematically produced, psychologically trained gameplay loops, rather more expressions of worlds that folks are engaged with, or want to engage with. AI has its place as a tool, but we have all the tools in the world and they… https://t.co/eL98XeLGW8October 6, 2025

Douse reckons it’s just a matter of time before AI "roots’ appear in the games industry, but that won’t necessarily be for the best. "We need more human-human expression, not less. So much of tech (VR, cloud, etc) has been a VC cash grab. We don’t need another cash grab, we need sustainability. That’s what the tools could be good for. Definitely not replacing people.

“There simply is no resonance without mutual respect. There is no mutual respect without respect for craft. There is no craft without the human touch; the relative skill issue, or ‘the exhibition of otherness.’ To turn games into digital, emotionless content is to abandon all resonance… which is why people play!”

Hear hear! And yet, I suspect the people ploughing billions upon billions into AI won’t take much notice unless and until the whole thing goes pop. Still, some good news: you probably don’t have to worry too much about Musk’s boast in particular. I’m still waiting for the countless Tesla robotaxis he said were just around the corner in 2019.

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