Recently, global game developer stocks experienced a significant sell-off influenced by Google's introduction of its AI tool "Project Genie." However, analysts from Poland's mBank SA pointed out that the market's panic reaction is "unreasonable," suggesting the related stock price declines resemble an exaggerated overreaction.

Last Friday, Google (GOOG.US, GOOGL.US) released an AI prototype tool called "Project Genie," capable of generating virtual 3D worlds, which sparked investor concerns that the technology could pose a disruptive threat to traditional game developers. As a result, shares of Unity Software Inc. (U.US), Roblox Corp. (RBLX.US), and Polish gaming giant CD Projekt SA collectively plummeted. During Monday's trading, Unity and Roblox shares rebounded, while CD Projekt declined for a third consecutive session in Warsaw, indicating that pressure on the European gaming sector had not fully dissipated.

mBank believes the market sell-off overlooks the fact that Project Genie currently has significant limitations. The bank's analyst, Piotr Poniatowski, noted that given the tool's current level of availability, the selling of game developer stocks represents an "unreasonable overreaction" by investors. "Considering the actual usability of Project Genie at present, we view last Friday's drop in game developer stock prices as an unnecessary panic," Poniatowski stated. He further added that, counterintuitively, AAA-level large game studios, which might seem most vulnerable, could instead become the biggest beneficiaries of such AI tools.

It is understood that the prototype web application for Project Genie allows users to generate playable virtual worlds by inputting text prompts or uploading images, and it can create characters that move through different environments. However, the tool currently offers only limited gameplay duration and experience, remaining far from mature commercial application. Poniatowski believes that, based on Google's promotional video, AI tools may eventually lead to a surge in projects from independent developers and small studios, thereby intensifying industry competition. In contrast, the core competitiveness of large developers with strong IP and immersive storytelling capabilities is not easily diminished. "If you look at it purely from a game production standpoint, we don't believe AAA studios will lose their value proposition," Wedbush analyst Alicia Reese also commented, adding, "Existing platforms still maintain a strong competitive position."