Capacity caught up with Buser at Google Cloud Next to talk about a broken industry, the promise of living games, and why telcos should be paying very close attention.
The numbers are contradictory, and Jack Buser knows it. “The games industry last year was actually bigger than it ever was before,” he says, citing nearly $200 billion in global spend in 2025. “And yet, if you look at operating profits, they’re down on average about 7% every year since 2021, below pre-pandemic levels.” Layoffs, studio closures, cancelled titles: it has been a rough few years for an industry that, on paper, has never been more popular.
The explanation, Buser argues, lies in a fundamentally broken business model. The vast majority of global playtime is spent in games that are over six years old: Fortnite, Minecraft, GTA V, and League of Legends, leaving new titles competing for less than half the available audience.
Meanwhile, the cost of building those new games has risen roughly 90% since 2017. “Most game companies are spending twice as much to build a game and then competing for less than half of the playtime,” he says. “It is a broken business model.”
Enter AI, in three parts
Buser’s solution, unsurprisingly given his day job, is AI. But his framing is more nuanced than the usual tech-industry boosterism. He identifies three distinct areas where AI is already reshaping games.
The first is development itself: removing the “high friction, high toil, low value” work from production pipelines so that creative talent can focus on what matters. Google Cloud announced a partnership with Capcom at the event, revealing that the Street Fighter and Resident Evil creator has deployed a Gemini-powered multi-agent system for play-testing that is now saving 30,000 hours of human labour every month.
“They’ve still got the studio, they’ve still got all the people,” Buser says, “but now they’re turbocharging it with AI so the people can operate at a much higher velocity.”
The second area is the business of games: marketing, analytics, and player understanding. AI is helping studios keep pace with the relentless content cycles of live-service games, generating more effective campaigns by mining large datasets to understand what players actually want. Square Enix, he notes, has used Google’s BigQuery platform to better understand and communicate with its player base, resulting in higher game completion rates.
The third, and arguably most exciting, is real-time AI during gameplay itself: what Buser calls the “smart NPC.” Non-player characters have been controlled by rudimentary AI for nearly 40 years, from simple if-then logic to the state machines of the 1990s.
Now, generative AI is enabling characters that can hold natural language conversations, reason contextually, and respond in ways that blur the line between human and computer. Square Enix’s Dragon Quest X Online has introduced an AI companion called Chatty Slammy, powered by Gemini, designed to guide new players and evolve alongside experienced ones. Fortnite, meanwhile, is deploying AI-powered NPCs through the same platform.
‘Living’ games?
It is this convergence that underpins Buser’s most ambitious concept: living games. “It’s the combination of traditional cloud-based technology with AI,” he explains. “We believe that when those two things come together in games, it creates something greater than the sum of the parts.”
He draws a parallel with the shift from 2D to 3D graphics in the 1990s, a moment he witnessed at the start of his career. “If you look at games before that shift and after, they were completely different,” he says.
PlayStation itself, where Buser would later spend nearly a decade, was born in that transition. But he believes the current shift is larger in scope. “It’s affecting every single aspect of games, from how they’re created to the types of player experiences that can be delivered, to how publishing organisations are being run.”
He is candid that much of the most transformative work is still in progress, hidden inside studios with development cycles of five years or more. “The work being done now won’t come to market for another year or two,” he acknowledges. “But we’ve got a front-row seat, and we’re already starting to see the first generation of living games land.”
A word for telcos
When the conversation turned to the relationship between gaming and telecoms, Buser was direct. Mobile games already represent the largest single segment of the games industry by consumer spend, making the telco-games relationship “already a very robust one.”
Operators have experimented across the spectrum, promotional bundles, bespoke experiences, acting as distribution platforms, but Buser sees the relationship as something more fundamental than commercial partnerships.
“When people buy a phone, they make a phone call, they send a text message, and then they generally play a video game,” he says. “This is one of the primary use cases for phones today.” As AI begins to unlock new categories of gaming experience, the implications for how telcos engage with and bundle games will only grow. “These two industries are very, very much intricately tied.”
Back to the PS2 era, but smarter
Buser’s ultimate vision for AI in games is, at its heart, a return to an older economic model. He points to the PlayStation 2 era as a benchmark — shorter development cycles, lower costs, more releases, more experimentation. “It was never healthier than it was during that time. So many games, and everybody was making money.”
AI, he believes, could compress today’s five-to-ten-year development cycles down to two or three years at a fraction of the cost. “Can we return to that type of industry? I think so. That is truly the promise of what this can do to fundamentally transform the economics of video games.”
The second half of that promise is novelty: genuinely new experiences that go beyond better graphics and new storylines. He points to two recently announced titles as examples. The first, from a company called Parallel, features AI agents that continue playing the game even after the user logs off, raising entirely new questions about game design.
In both that game and another called You vs Zombies, players can create their own characters simply by describing them in natural language. “It puts the power in the player’s hands to create something that otherwise would have been very difficult and time-consuming,” he says. “But they can just do it using their words.”
For an industry under enormous pressure, it is a compelling pitch. Whether the living games era delivers on its promise or follows Stadia into the footnotes remains to be seen. But Buser, at least, has seen enough from the inside to believe the shift is already underway.
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