New York, January 30, 2026, 15:48 EST — Regular session
- Late Friday, Unity shares plunged on heavy trading as investors absorbed news of Google’s new AI “world model.”
- The decline spread to other videogame stocks, highlighting just how quickly AI news is shaking up the market.
- Traders are now focused on Unity’s February 11 earnings for clues on demand, pricing, and AI strategy.
Unity shares dropped 25.7% to $28.53 late Friday, hitting a session low of $27.64 earlier. Trading volume reached roughly 78.4 million shares, according to exchange data.
Videogame stocks took a hit after Google, Alphabet’s unit, unveiled an AI model that creates interactive digital worlds from simple prompts, sparking worries about a shake-up in game development. Take-Two Interactive dropped roughly 10%, Roblox slid over 12%, and Unity also fell sharply, Reuters reported. Joost van Dreunen, a games professor at NYU Stern, called AI-driven design a potential “real transformation” for how games are made. (Reuters)
Google introduced Project Genie as an experimental prototype designed to create, explore, and remix interactive worlds through text prompts and images. Access is being gradually extended to Google AI Ultra subscribers in the U.S. The tool currently faces limits on realism, character control, and restricts generations to 60 seconds. (Blog)
Unity CEO Matthew Bromberg dismissed claims that “world models” threaten the relevance of game engines. In a post on X highlighted by TheFly, he described current AI outputs as “probabilistic and non-deterministic,” labeling the technology “a powerful accelerator.” Bromberg argued that Unity’s engine can harness AI-generated content, transforming it into more manageable, production-ready simulations. (TipRanks)
Unity provides software for creating and operating 2D and 3D content, along with tools designed to help developers engage players and monetize games and interactive experiences, according to Reuters company data. (Reuters)
Investors face a clear concern: if AI can churn out playable worlds fast, developers might cut back on spending for traditional engines and their toolchains. This debate is unfolding in stock prices now, moving much faster than any usual product cycle.
What remains uncertain is how quickly these “world model” demos will turn into reliable production tools for studios. If adoption remains narrow or the process still depends on an engine for physics, logic, and live operations, Friday’s move might end up as a quick repricing instead of a sustained change.
Unity’s downside looks steeper. Should studios and indie developers lean on AI-first creation tools and cut back on paid engine seats or push on pricing, the company’s upcoming guidance might come under heavier fire than usual.
Investors are turning their attention to Unity’s upcoming earnings report for clearer insight into demand trends and any shifts in customer commitments. The company will release its fourth-quarter and full-year 2025 results before markets open on February 11, with a webcast scheduled for 8:30 a.m. ET. (Unity Investors)
