Everyone’s missing the real story here. Project Genie generates 60-second “worlds” at 720p and 20 FPS. Characters sometimes walk through walls. The physics aren’t physics, they’re patterns inferred from video training data. Google itself calls it “not a game engine.” You can’t build game mechanics, save states, or inventory systems with it. One review called it “closer to an interactive vignette than a world you can genuinely inhabit.” Interactive vignette. That’s what vaporized $8B+ in market cap across Unity, Take-Two, Roblox, and CD Projekt today. Unity dropped 22%. Its worst one-day drop since 2022. For a research prototype that admits, in its own launch blog, that it can’t even render legible text. The GDC survey this week found 52% of game devs think AI is negatively impacting the industry, up from 18% two years ago. One ML ops employee was quoted saying “We are intentionally working on a platform that will put all game devs out of work and allow kids to prompt and direct their own content.” That quote got the fear. But Project Genie can’t make Wordle. It generates hallucinatory walking simulators that break after a minute. Investors just repriced the entire game development industry over a tech demo that competes with a screensaver.