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The initial hype around Generative AI in game development is giving way to a more pragmatic view as rising costs expose limited, inconsistent utility. While AI offers incremental gains in specific tasks like code completion, its performance on complex creative work and large codebases falls short, requiring extensive human oversight. This, combined with an "enthusiasm gap" between executives and developers, suggests AI will be a niche tool rather than a revolutionary force.

Nvidia's DLSS 5 reveal sparked controversy after showing AI altering Resident Evil Requiem's Grace Ashcroft, with devs reportedly unaware of the partnership. This raises concerns about artistic integrity and a potential culture shift for studios like Capcom, known for their anti-AI stance.