SAG-AFTRA Scores Big Win Against AI in Gaming Industry Battle

The gaming industry just witnessed a landmark victory for labor rights as SAG-AFTRA successfully concluded an 11-month strike against major video game companies, securing groundbreaking protections against artificial intelligence (AI) misuse. The agreement, ratified by 95.04% of voting union members on 24 July 2025, represents a watershed moment in how the entertainment industry addresses AI-generated digital replicas of performers. This hard-fought deal not only establishes crucial precedents for worker protections in the digital age but also highlights the evolving legal landscape when it comes to AI and employee rights.

The Legal Framework of Labor Unions in Gaming

The video game industry’s unionization efforts operate within the framework of the National Labor Relations Act (NLRA) of 1935, which grants private sector employees the right to organize, engage in collective bargaining, and strike. Through the 1935 National Labor Relations Act employees have the legal right to form a union in their workplace, engage in collective action around work issues, and it bars employers from anti-union and anti-organizing retaliation. SAG-AFTRA is a union of 160,000 professional actors, announcers, broadcast journalists, dancers, DJs, news writers, news editors, program hosts, puppeteers, recording artists, singers, stunt performers and voiceover artists. 

However, the gaming industry presents unique challenges. Unlike traditional entertainment sectors, video game companies historically operated more like tech companies, often resisting the entertainment industry’s established labor practices. Duncan Crabtree-Ireland, SAG-AFTRA’s national executive director, noted that gaming companies are now “shifting their business practices” and have “closed the loop with the other companies in the entertainment and media states.”

The recent political climate has added urgency to unionization efforts. With Trump’s firing of NLRB member Gwynne Wilcox and Elon Musk challenging the National Labor Relations Act as unconstitutional, unionized workers are increasingly viewing traditional legal frameworks as under threat. This has prompted the formation of United Videogame Workers-CWA, a North American union venture that hope to operate outside traditional NLRB certification requirements.

The Core Legal Battle: AI and Digital Replicas

The central legal issue in the SAG-AFTRA strike involved AI-generated digital replicas or reproductions of performers’ voices, likenesses, and performances. The agreement addresses several critical legal concerns:

Consent and Disclosure Requirements

The contract includes requirements for consent and disclosure whenever AI is used to create digital replicas of performers. This aligns with emerging state legislation, particularly California’s AB 2602, which makes digital replica contract provisions retroactively unenforceable if they permit creating and using a digital replica without proper consent.

Strike Suspension Rights

The most contentious issue involved what SAG-AFTRA negotiator Sarah Elmaleh called “strike suspension language.” The agreement grants actors the ability to suspend consent if there’s a strike, ensuring studios can’t generate new material from their likenesses without approval. This provision prevents what Elmaleh described as “an unprecedented type of scab—a simulation of themselves.”

Compensation Structure

The final agreement also removed the unlimited digital replica buyout provision and ensures performers who consent to digital replica use receive compensation comparable to direct service provision. This addresses concerns about one-time payments for unlimited use of performers’ digital likenesses.

State and Federal Legal Developments

The gaming industry strike coincided with significant legislative activity around AI and employment:

California Leading the Charge

California has emerged as the primary battleground for AI workplace regulation:

• AB 2602 (Cal. Lab. Code §927) makes certain digital replica provisions unenforceable, particularly those allowing AI training without compensation.
• AB 1836 updates law to prohibit using deceased persons’ digital replicas without estate consent, imposing statutory damages of $10,000 or actual damages.
• California’s Civil Rights Council adopted regulations explicitly applying anti-discrimination law to AI tools, requiring employers to test for and mitigate bias.

Multi-State Momentum

In 2024 alone, over 400 AI-related bills were introduced across 41 states.

Key developments include:

• Colorado’s Artificial Intelligence Act, effective February 1, 2026, becoming the first comprehensive law on AI hiring tools.
• Illinois requiring employers to notify employees when AI is used for employment decisions.
• New York’s Digital Replica Law, effective January 1, 2025, regulating contracts for digital simulations.

International Considerations

While the SAG-AFTRA agreement primarily affects U.S. operations, the global nature of gaming raises international legal questions. United Videogame Workers-CWA operates across the U.S. and Canada, reflecting the industry’s cross-border nature. Global companies must also navigate varying international standards on AI use, data protection (such as GDPR in Europe), and labor rights.

Implications for Employers and the Industry

Compliance Requirements

Gaming companies must now:

1. Implement robust consent mechanisms for digital replica creation.
2. Maintain detailed records of AI use in performer-related decisions.
3. Ensure human oversight in AI-driven processes.
4. Develop strike-proof systems that respect performer consent withdrawal.

Industry Precedent

The agreement makes clear that gaming companies are “squarely and undeniably in the same league as old Hollywood studios when it comes to working with talent.” This shifts the industry from tech-based to unionized entertainment-industry standards.

Looking Forward: The Future of AI in Gaming Employment

The SAG-AFTRA victory represents just the beginning of AI regulation in gaming. With Republican control of Congress unlikely to produce federal AI workplace laws, state-level activity will likely intensify. Gaming companies should prepare for:

1. Expanded State Regulations: California and New York are expected to lead with comprehensive AI workplace laws.
2. Evolving Union Strategies: Multi-jurisdictional unions like UVW-CWA may proliferate as traditional NLRB processes face challenges.
3. Technical Standards: Industry-wide protocols for AI consent, data storage, and usage tracking.
4. Cross-Industry Harmonization: Gaming standards influencing broader entertainment and tech sectors.

Conclusion

SAG-AFTRA’s successful negotiation demonstrates that traditional labor law principles can adapt to address 21st-century technological challenges. The agreement’s AI protections—from consent requirements to strike suspension rights—establish a framework that balances innovation with workers’ rights. As SAG-AFTRA president Fran Drescher stated, “progress is the name of the game,” and this contract represents significant progress in ensuring that AI enhances rather than replaces human creativity in gaming.

For gaming companies, the message is clear: the era of operating outside traditional entertainment industry labor standards has ended. Success in this new landscape will require proactive engagement with evolving legal requirements, genuine partnership with creative talent, and recognition that AI’s promise can only be fulfilled through ethical implementation that respects performer rights.