🍪 The Industry Didn’t Slow Down. It Just Got Louder. -

Hello there, industry survivors, stubborn and still building.

While the holidays tried to quiet things down, the game industry did what it does best when nobody’s watching. It made moves. Real ones. AI lines were drawn, money changed hands, governments stepped in, and studios made it clear what they will and won’t tolerate going into 2026.

Here’s what actually mattered these past few days.

AI Is Officially a Line in the Sand

The AI conversation crossed a threshold this week. Not in theory. In consequences.

After Clair Obscur: Expedition 33 lost its Game of the Year title in the Indie Game Awards due to undisclosed generative AI usage, Sandfall Interactive came out swinging. The studio publicly committed to a strict no-AI policy, stating that every asset in the game is human-made and that early AI experiments from years ago were removed before launch.

Awards bodies didn’t budge. Rules are rules, even if the tech use was limited.

🦊 Kiki: I’m surprised Sandfall even cared this much about the award or the AI backlash. Normal people don’t care about either of those things. The game was great, and that’s what actually mattered.

This feels more like wanting to keep the “good guy in the industry” image intact. And honestly, I’m pretty sure every single studio out there uses AI in one way or another by now. Hopefully these awards get some common sense and rethink rules like this, because if they don’t, they might not have any winners left next year.

🍪 Chip freezes, looks around, then slowly nods like he just realized something uncomfortable.

At the same time, Level-5’s CEO pushed back against the internet narrative that AI is “writing games now.” His message was clear. AI is being used to speed things up, not replace teams. Tools, not authors.

Different stances, same reality. AI isn’t optional anymore, but pretending it doesn’t exist is just as risky as abusing it.

Money Is Still Betting on AI. Just Not the Way You Think.

While some studios draw red lines, investors are doing the opposite.

GameByte, a young studio-tool startup, raised $1 million in pre-seed funding to build an AI-powered platform that generates playable games and ad experiences from text prompts. The pitch isn’t “replace devs.” It’s “remove friction.”

🦊 Kiki: This doesn’t surprise me at all. Investors aren’t funding AI because they hate developers. They’re funding it because games are expensive, slow to make, and risky as hell. Anything that promises speed or lower costs is going to get money thrown at it.

What’s funny is that the conversation online is always “AI versus devs,” but in reality it’s “AI versus deadlines.” Studios that pretend this isn’t happening are just lying to themselves.

🍪 Chip stares at the word “deadlines” like it personally wronged him.

This split, studios policing ethics while investors fund acceleration, is going to define a lot of uncomfortable conversations next year.

Ownership Is Consolidating Again

Two moves stood out.

First, XD Entertainment acquired all Torchlight IP assets, including source code and brand rights. That’s not nostalgia buying. That’s IP consolidation for long-term leverage in an increasingly risk-averse market.

Second, CD PROJEKT RED sold GOG to its co-founder, effectively separating storefront operations from game development. GOG stays DRM-free and independent. CDPR tightens its focus.

🦊 Kiki: This feels less dramatic than people want it to be. Studios aren’t collapsing. They’re cleaning house. Owning fewer things and doing them well is way safer than trying to be everything at once.

Selling GOG and picking up Torchlight both scream the same thing to me. Focus on what you actually know how to run. Everything else is just noise.

🍪 Chip watches a bunch of imaginary tabs close one by one and looks relieved.

Governments Are Done Watching From the Sidelines

Shanghai made it official. Gaming and esports are now policy-level priorities.

The city launched a 50 million RMB annual fund to support local studios, talent, and esports organizations, explicitly positioning games as cultural exports and economic engines.

Meanwhile, India quietly finished its own reset. After years of regulatory chaos, the country closed 2025 with clearer rules, reduced reliance on real-money gaming, and official esports recognition.

🦊 Kiki: This is the part nobody wants to admit. When governments start caring about games, it’s not because they suddenly love art. It’s because they see money, jobs, and influence.

And honestly, that’s fine. If that’s what it takes for studios to get support, funding, and legitimacy, I’ll take it. Just don’t pretend it’s about passion. It’s about power and economics.

🍪 Chip salutes, then double-checks which country he’s in.

VR and the Search for the Next Lane

Argentina’s etermax made its first serious move into VR, launching a comedic, accessible title aimed at expanding beyond mobile trivia dominance.

No hype. No “metaverse” buzzwords. Just testing a new lane.

🦊 Kiki: This is the smartest way to approach VR right now. No big speeches. No “this changes everything.” Just try something, see if it works, and move on if it doesn’t.

VR doesn’t need another savior. It needs studios willing to experiment without betting their entire future on it.

🍪 Chip puts on an imaginary headset, trips, and pretends that was part of the demo.

Stay disciplined, like the studios drawing real AI boundaries.
Keep building, like the teams finding new lanes instead of waiting for perfect conditions.
And remember, the industry doesn’t pause for holidays. It just makes quieter decisions.

🦊 Kiki · 🍪 Chip · ⭐ Byte · 🦁 Leo