Google made Project Genie available to Google AI Ultra subscribers in the United States, a move that coincided with immediate downward pressure on several public video game companies, according to a market note from Freedom Capital.
The technology at the center of the reaction is Genie 3, a generative platform Google first previewed in August 2025. Genie 3 is described as enabling users to build, explore and alter interactive virtual worlds by supplying text prompts or images. Google said it will widen access beyond the U.S. over time.
Genie 3 offers three headline functions: world sketching, which allows users to create environments; world exploration, which produces scene elements dynamically as a user navigates; and world remixing, which enables on-the-fly changes to the environment. The system accepts environment and character prompts, supports switching views between first- and third-person perspectives, and permits real-time sketch adjustments.
Freedom Capital identified several names that experienced selling pressure after the announcement. Quoted levels in the firm’s note included Unity at $29.75, Roblox at $65.98, Take-Two at $214.59, Nintendo at ¥10,055 and AppLovin at $491.86.
Take-Two drew particular attention because its stock was cited at $214.59 in the report but was trading at $220.30 and carrying a market capitalization of $40.44 billion at the time of the market update. The company is due to release fiscal results in four days on February 3, an event market participants expect will help clarify how the company stands amid these sector developments.
Freedom Capital characterized the investor response as "overdone," indicating the firm viewed the sell-off as an exaggerated reaction to the potential competitive effects of the new generative technology on the gaming industry’s incumbents.
Data cited from InvestingPro showed Take-Two posted 13.98% revenue growth over the last twelve months and noted the stock was trading slightly above its Fair Value. The same data set highlighted that analysts covering Take-Two maintain generally positive stances, with price targets spanning from $160 to $300. That range suggests divergence among expectations and implies potential volatility in the lead-up to next week’s earnings release.
Recent analyst and company updates cited in market commentary outlined continued support from several brokerages despite mixed operational signals. Jefferies retained a Buy rating with a $300 price target while signaling that the upcoming earnings print may be muted because of the previously announced delay in Grand Theft Auto VI. Wells Fargo lifted its price target to $288 from $277, citing better-than-expected performance prospects across the publisher’s gaming portfolio. BMO Capital raised its target to $275 from $252 after describing Take-Two’s prior second-quarter results as impressive. TD Cowen reiterated a Buy stance with a $284 target, identifying Take-Two as a major operator in the global games market.
Not all data points were uniformly positive. Raymond James highlighted mixed November tracking, reporting declines in Grand Theft Auto V and NBA 2K26 that contrasted with earlier upbeat commentary. Nevertheless, Jefferies pointed to solid console tracking for NBA franchise titles and GTA Online, even in the context of the GTA VI delay.
The market reaction to Project Genie underscores investor sensitivity to generative AI developments and their potential to reshape content creation and distribution across entertainment verticals. The short-term price movements observed in Unity, Roblox, Take-Two, Nintendo and AppLovin reflect that sensitivity, while upcoming corporate disclosures, starting with Take-Two’s earnings, are likely to shape near-term sentiment.
Clear summary: Google activated Project Genie access for U.S. Google AI Ultra subscribers, giving users the Genie 3 toolkit for generating and modifying interactive worlds. The rollout coincided with a drop in multiple game-related stocks—Unity, Roblox, Take-Two, Nintendo and AppLovin—prompting debate among investors and analysts about how generative AI could influence the sector. Take-Two remains notable for its near-term earnings report and sustained revenue growth, with analysts offering a broad range of price targets.
Key points:
- Google’s Project Genie (Genie 3) is now available to Google AI Ultra subscribers in the U.S., and will expand to more markets over time.
- The announcement coincided with declines in video game-related stocks, with specific pressure on Unity, Roblox, Take-Two, Nintendo and AppLovin.
- Take-Two, while experiencing selling pressure, shows nearly 14% revenue growth over the last twelve months and draws continued analyst support with price targets ranging from $160 to $300; an earnings release on February 3 could influence short-term price action.
Risks and uncertainties:
- Market reaction may remain volatile as investors reassess competitive dynamics between generative AI platforms and traditional game studios and middleware providers - impacting the gaming and software sectors.
- Near-term operational data for publishers, including Take-Two’s upcoming earnings, could diverge from analyst expectations and cause additional price swings in gaming stocks - affecting equity valuations in the media and entertainment sector.
- Mixed performance metrics across major titles (for example, recent tracking declines in some legacy franchises) create uncertainty about the sustainability of revenue trends even as analysts remain broadly positive - relevant to publishers and platform providers.