The Potential Impact of Artificial Intelligence on Employment in the Video Game Industry and Beyond

Thousands of jobs worldwide have already been displaced by artificial intelligence, and projections for the coming years suggest an increasingly challenging outlook for the global workforce.

It is difficult to determine how many job losses can be attributed solely to artificial intelligence, as several other factors must be considered when assessing its impact on employment and predicting future job losses.

Looking at the video game industry alone, job losses so far this year have surpassed 11,000, exceeding the total reported in 2025, although remaining below the figures recorded in 2024. While AI-driven automation may be contributing to some of these losses, the industry is also experiencing an ongoing correction following over-hiring during the COVID-19 pandemic, alongside weaker-than-expected game sales.

At the same time, development costs continue to rise, placing further financial pressure on studios and publishers. Consumers are also facing tighter household budgets, leaving them with less disposable income to spend on increasingly expensive video games. Together, these factors are creating a challenging environment for an industry already undergoing significant technological and economic change.

Rising operating costs are a significant contributing factor, with at least 32 studios reportedly closing this year as a result of increasing financial pressures.

This is one of the key reasons why game studios are increasingly adopting artificial intelligence as a means of reducing costs and improving efficiency. Companies such as Epic Games are placing greater emphasis on AI-driven development, while Ubisoft and PlayStation Studios are also exploring the wider integration of AI technologies. Similarly, Krafton and Capcom are investing in AI capabilities, including agentic AI, as part of their efforts to streamline development processes and enhance productivity.

Beyond the video games industry, automation and artificial intelligence are increasingly capable of performing tasks traditionally associated with entry-level positions. Major corporations such as Microsoft have undertaken significant workforce reductions while redirecting substantial investment towards AI development. Microsoft recently announced that they would offer to buyout 60,000 employees in efforts to redirect funding. Similarly, financial institutions such as Barclays announced five thousand redundancies earlier this year as the industry continues to evolve.

The financial sector has become one of the leading adopters of AI-driven technologies, using automation to improve efficiency, streamline operations and reduce costs. As AI capabilities continue to advance, it seems increasingly inevitable that other industries will follow suit, potentially reshaping the employment landscape across multiple sectors.

While job losses directly attributable to artificial intelligence remain relatively limited, as highlighted in this Stanford article, the coming years could bring significant challenges for many white-collar professionals. As AI technology continues to evolve, businesses are likely to gain access to increasingly sophisticated, cost-effective, and efficient solutions capable of performing tasks traditionally undertaken by human employees. This shift could fundamentally reshape the employment landscape, particularly in sectors where routine and knowledge-based tasks are increasingly susceptible to automation.

In Britain, AI Minister Kanishka Narayan is working to develop a contingency plan to prepare for a potential worst-case scenario involving artificial intelligence. Narayan, who was appointed by Andy Burnham last July, addressed the issue at a Labour Party conference, emphasising the importance of anticipating and preparing for the potential impact of AI.

“If it’s going to hit us in a big way, you are going to want to be as ahead of the curve as possible,” he said.

Carsten Jung, of the IPPR think tank, said: “In a worst case scenario you could have about 8 million jobs being negatively affected by this.” 

Jung said the think tank was working on a “pandemic preparedness” report on AI labour market disruption.

While widespread online speculation may paint a bleak picture of the future, it’s equally important to understand the upside of artificial intelligence. A new era of innovation also presents significant opportunities for growth and progress. Successfully navigating the implementation of AI will depend on our ability to adapt, embrace emerging technologies, and develop the skills necessary to work confidently and effectively alongside AI.