Zhongjin: The world model has not yet touched the core of the gaming industry. Top manufacturers still have a strong content moat.

Zhongjin published a research report stating that with the emergence of AI-generated physical world models such as Genie3, a hot debate has been stirred up in the market about the "game industry will be disrupted". The market overestimates the short-term disruptive power of AI models on the gaming industry, while underestimating their long-term empowering value as tools. The world model represented by Genie3 is essentially an efficient content generation tool, but it has not touched on the core of games - gameplay design, numerical balance, and long-term operation. Top game companies still have a strong content moat. Main points of Zhongjin: Is the world model a disruptive productivity in the gaming industry? What is the development direction of its application in the gaming industry? Zhongjin believes that the current application of the world model in game production is still in its early stages and plays a partial empowering role, which is more obvious in pre-research and 3D asset production. In the future, it is more likely to be used as a single-scene generation tool rather than a comprehensive game platform. Will AI new technologies reshape the game industry chain? Who will benefit? Zhongjin judges that the most directly impacted is the standardized outsourcing service sector in the industry chain, mainly including art asset production, basic audio recording, and some code writing. One of the directions of profit pool migration is the creative and management links in the upstream of the game industry chain. Top game companies still have a strong content moat In the medium to long term, companies that are good at using AI to empower creativity, tapping into the potential of AI, and continuously consolidating IP and gameplay advantages are expected to have sustainable advantages in the current transformation. Ecological platforms that aggregate creators and tools are expected to embrace AI, innovate tools to control new production and distribution entry points, and gain new increments in the transformation. The midstream engine side has high barriers built by pipeline data, which is difficult to be replaced in the short term, but the long-term business model reconstruction still needs to be verified. Small and medium game companies and studios face both opportunities for equalization of creativity thresholds and challenges of homogenized content explosion. In terms of targets It is recommended to pay attention to top game companies such as NTES-S(09999) and Take-Two(TTWO.US) that are good at using AI to empower; ecological platforms that aggregate creators and tools like Roblox(RBLX.US) and XD INC(02400). Risk factors The lowering of game production thresholds and intensified market competition, potential competition brought by AI-native gameplay, copyright issues of AI content, and relatively low user acceptance of AI content.