The Triple Threat: How AI in Game Development Creates Crises in IP, Data Privacy, and Job Stability

As AI rapidly becomes a fundamental tool in the game development pipeline, the very innovation meant to streamline and benefit the industry is proving a profound threat, exposing game publishers and the gaming industry to a convergence of crises across Intellectual Property (IP), Data Privacy, and job stability.

Activision and the Use of Generative AI

At the beginning of 2025, fans of the popular series Call of Duty noticed a few odd features in the Black Ops 6 loading screens, calling cards, and other aspects of the game that pointed towards the use of Generative Artificial Intelligence (GenAI).¹ For example, in one of the loading screens, there was an image of a Zombie Santa which many claim had six fingers. 

A few months after the allegations arose, Activision admitted to the use of GenAI, following new AI disclosure rules on Steam. On Steam, the AI Generated Content Disclosure statement of Black Ops 6 reads: “Our team uses generative AI tools to help develop some in game assets”.²

Since the disclosure, the game and Activision have received a lot of backlash from users, for example one user wrote: 

“Since Activision can’t be bothered hiring real people anymore, I’ve decided to take advantage of AI myself and ask ChatGPT to write this negative review for me”.³ 

Another angry user on Reddit wrote: “I don’t deserve to be rewarded with half-hearted soulless fake art after completing a challenge this difficult. Remake this calling card, hell trace it if you have to. But give us players more respect than this”. ⁴

Activision’s disclosure statement itself was also met with significant backlash, particularly regarding its vagueness, as the company claims they use AI to help develop some in-game assets, but fail to elaborate on key questions pointed out by Rock Paper Shotgun’s Nic Reuben: “What does “help” mean here? What does “develop” mean? What about “some”?...”.⁵

This backlash did not seem to deter Activision, as with the recent release of Call of Duty: Black Ops 7, similar remarks arose from users, who are once again criticising the game for being filled with “AI slop”.⁶ For Black Ops 7, Activision issued an identical Steam disclosure, reading: ”Our team uses generative AI tools to help develop some in game assets”.⁷

Following the continuing backlash, they also released a statement reading: “Like so many around the world, we use a variety of digital tools, including AI tools, to empower and support our teams to create the best gaming experiences possible for our players. Our creative process continues to be led by the talented individuals in our studios.“⁸ 

Users’ frustrations reflect a larger issue regarding GenAI in the gaming industry, the use of which is becoming evermore common, with 1 of 3 game developers reportedly using it to streamline game development in 2025.⁹ This article highlights three specific, non-exhaustive problems the author believes are of particular importance to publishers themselves and the counsel advising them. The three issues that will be discussed concern the intersection of GenAI with IP law, Data Protection law, and job stability in the gaming industry.

Intellectual Property (IP): The Erosion of Ownership and the Infringement Minefield

IP plays a key role in the gaming industry and esports, as the effective protection of it can be a determining factor to the success or failure of video game companies.¹⁰ The increased use of GenAI in the gaming industry threatens the effectiveness of this protection from two directions: the content the AI is trained on, and the legal status of the content it creates.

The Training Data Liability

When game developers use AI models to create any aspect of the game, that AI is trained on vast datasets consisting of existing, potentially copyrighted works.¹¹ If that is the case, the use of these AI models leaves the developers exposed to potential secondary copyright infringement lawsuits from original artists, as the developer, through the AI model, becomes the party publishing the infringing work.

For example, in the recent landmark ruling on the case Getty Images v Stability AI EWHC 2863 (Ch), although the court dismissed the claim on a technicality of jurisdiction, it nevertheless confirmed the crucial principle that an AI model can, in theory, be treated as a legally liable ‘article’ for secondary infringement.¹² Although this decision occurred in the UK, and IP law is jurisdictional, the ruling nevertheless demonstrates how game developers who use AI models that draw on original works can be held liable for secondary copyright infringement.

In a potentially more significant case from Germany, GEMA v. OpenAI (case no. 42 O 14139/24), the court found that an AI model may contain copies of a work by ‘memorising’ it, which thus constitutes a copyright infringement.¹³ In this case, GEMA, the German collecting society for musical rights, demonstrated that OpenAI’s ChatGPT was capable of reproducing song lyrics from its collection. The court held that this capacity pointed towards the unauthorised copying of the protected works within the AI model during its training, and this reproduction constituted an infringement.¹⁴

This case directly demonstrates that if a game developer is sued for a potential copyright infringement through its use of GenAI, for example if it uses GenAI to generate sounds for the game, it risks being found liable if the AI model it utilises ‘memorises’ copyrighted sounds to generate the desired content.

Hence, game developers have to be extremely cautious with the AI models they utilise for their GenAI, wary that the model may be using copyrighted materials, which could lead to an infringement by the developer itself. The author’s suggestion in this scenario would be for the game developers to include indemnification clauses for potential IP infringement in their AI vendor contracts for full legal protection.¹⁵ If the developer develops its own AI model, it must ensure that it trains it solely on a vault of legally cleared assets and information.

Erosion of IP Protection

A further potential IP-related problem that arises with the use of GenAI by game developers is the risk that some AI-created content in their games may be deemed unprotectable. In a jurisdiction like the US, for content to be protected by copyright, it must satisfy the requirement of human authorship: “The U.S. Copyright Office will register an original work of authorship, provided that the work was created by a human being”.¹⁶

In the recent case of Thaler v Perlmutter 89 F.4th 104 (D.C. Cir. 2025), the D.C. Circuit affirmed that works generated solely by a machine, without significant human creative control over the final product, are ineligible for federal copyright protection.¹⁷ Drawing on this case, if Activision was to, for example, try and enforce its copyright on the Zombie Santa call card discussed above, the court may find the call card to be unprotectable as the six fingers, an error known amongst GenAI shortcomings, may indicate that no human in Activision exerted significant human creative control, thus failing to meet the human authorship requirement.

This potential issue is one that game developers must keep in mind when deciding to use GenAI in their games. If they do choose to utilise GenAI, particularly in the US, they must ensure that there is significant human creative intervention over the final outcome, so they are able to be fully protected.

Data Privacy and Regulatory Compliance

AI models generally require large amounts of data.¹⁸ As explained in an analysis by the law firm Taylor Wessing: “To use AI to improve player experience, AI models need to be trained, which can involve tracking millions of player interactions and data points, including those of children.”.¹⁹

In an esports and competitive gaming context, this data could include, for example, the highly valuable and detailed movement patterns and tactical decision-making statistics of professional players, which are often used to train AI models in game development.

This use of AI models thus means that game developers will be subject to heightened GDPR scrutiny from Data Protection authorities. Specifically, the EU/UK GDPR requires a clear lawful basis for using a person’s personal data.²⁰ Thus, game developers must increase their diligence in ensuring a proper legal basis for all the data their AI models process and communicating those purposes to their users.

Importantly, finding a proper legal basis for processing the personal data might prove a real challenge for game developers. For example, if they seek to invoke ‘legitimate interests’ as the legal basis, they will have to carry out a Legitimate Interests Assessments (LIA), however it may be difficult for them to demonstrate, as argued in Taylor Wessing’s analysis, “that a player’s rights and freedoms have not overridden their own legitimate interests where personal data is processed in a manner they did not ‘reasonably expect”. ²¹

In industries such as esports and sports generally, companies often rely on legitimate interests to process the aforementioned behavioral data tracked from the players. However, as seen with ‘Project Red Card’ (a UK legal action where professional football players challenged the unauthorised use and sale of their performance and personal data to third parties, such as betting companies),²² players are increasingly challenging whether this commercial use truly aligns with the required legal basis.

There are other data subject rights that game developers will need to respect that can prove significant challenges when using AI models. For example, data subjects enjoy the right to be informed, meaning that if a developer uses their personal data to train the AI model, they must be informed of this to ensure the processing is fair and transparent.²³ However, identifying the individuals whose data is being used to train the model could be extremely difficult.²⁴

Hence, from a data protection standpoint, the increased GDPR scrutiny game developers are subject to when using GenAI means that they must conduct more Data Protection Impact Assessments (DPIAs) for all the AI systems they work with to ensure full compliance, which could be very costly and time-consuming.

Toll on Job Stability and Future Innovation

The introduction of GenAI in the gaming industry has already taken a toll on the job market. Even Activision, the main subject of our general discussion in this article, has already laid off numerous workers, partially due to the use of GenAI in their game development.²⁵ At the beginning of 2025, research was published by the Game Developers Conference (GDC) which revealed that one in ten game developers has been laid off in the past year.²⁶

The report also inquired as to the general sentiment amongst employees in game development companies, where 30% of respondents argued that AI is hurting the gaming industry overall for reasons such as IP theft, quality of AI-generated content, and job displacement.²⁷

Following Activision’s disclosure that they once again used GenAI in the new Black Ops 7, even lawmakers identified the imminent risks that are being posed to the workforce. Rep. Ro Khanna (D-Calif.) commented on the Black Ops 7 situation on her social media: 

“We need regulations that prevent companies from using AI to eliminate jobs to extract greater profits. Artists at these companies need to have a sayin how AI is deployed. They should share in the profits. And there should be a tax on mass displacement.”.²⁸

The author believes that when GenAI replaces specialised roles within studios, these studios risk losing the diverse perspectives and deep artistic visions that transform games from mere products into culture-defining and industry-setting masterpieces. AI models are trained on past data and creativity, and this, while efficient, does not allow for the same human-led innovation we have seen in the gaming industry in the past.

Furthermore, in roles like developers, it has been found that people in junior roles tend to be laid off the most and find it hardest to come across open positions.²⁹ This directly starves the gaming industry of its future innovators and threatens the quality of all future game titles. 

Takeaways

Situations such as the one faced by Activision with Black Ops 6 and 7 will surely continue to occur as more studios will start implementing GenAI to streamline their game development. Indeed, the use of AI in game development undoubtedly has benefits. For example, AI allows for more efficient and intelligent game testing, as the AI can simulate thousands of scenarios to uncover bugging issues.³⁰ Moreover, AI can allow the creation of more realistic NPC behavior.³¹ 

Yet, the increasing use of AI by game developers presents clear risks that must be monitored and accounted for by the companies and their advising counsel. As discussed, the use of AI risks infringing on copyrighted material, as established in Getty Images v Stability AI, as the AI model is trained on potentially protected products. Furthermore, the AI-generated content integrated into games by developers may be unprotectable according to IP law (especially in the US) if they lack human involvement.

Developers must also account for the increased data protection law scrutiny that will follow the increased use of AI models, as the vast amount of data processed by the model will require a valid legal basis (which may be difficult to find), and various data subject rights will have to be respected. Thus, developers are encouraged to conduct thorough DPIAs for all AI models they might wish to utilise. 

Lastly, AI’s involvement in the gaming industry has already made its mark on the job stability in the gaming industry. This has potential for devastating implications on the future of the gaming industry, which may lose its creativity and see future games looking eerily similar as more AI models start building on each other or on similar information.

For the esports sector, these risk might even be amplified: the use of GenAI to create in-game content could lead to challenges over the authenticity of competitive play, the unauthorised processing of professional player data raises data privacy and commercial rights challenges (as seen with Project Red Card_, and the displacement of human designers threatens pushing away the consumer and player-base that fuels the competitive scene.

Hence, the author suggests that developers must be very cautious and think twice before using GenAI or any AI when developing their games, as it might come with several legal issues that need accounting for. Game developers must reflect whether the added efficiency of the use of AI in game development is worth the added effort (and cost) in regulatory compliance and potential public backlash.

1.  Wesley Yin-Poole, ‘Activision Finally Admits It Uses Generative AI for Some Call of Duty: Black Ops 6 Assets After Backlash Following ‘AI Slop’ Zombie Santa Loading Screen’ (25 February 2025) https://www.ign.com/articles/activision-finally-admits-it-uses-generative-ai-for-some-call-of-duty-black-ops-6-assets-after-backlash-following-ai-slop-zombie-santa-loading-screen accessed 24 November 2025.
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2.  Chris Kerr, ‘Players lambast Activision after publisher confirms generative AI was used in Black Ops 6’ (25 February 2025) https://www.gamedeveloper.com/production/players-lambast-activision-after-publisher-confirms-generative-ai-was-used-in-black-ops-6 accessed 25 November 2025.
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3. ibid. ↩︎
4. Nic Reuben, ‘Call Of Duty’s generative AI disclosure reveals a glaring issue with Steam’s policies’ (13 March 2025) https://www.rockpapershotgun.com/call-of-dutys-generative-ai-disclosure-reveals-a-glaring-issue-with-steams-policies accessed 24 November 2025.
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5.  ibid.
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6.  Michael Kan, ‘AI Use in ‘Call of Duty: Black Ops 7′ Draws Fire From US Lawmaker’ (17 November 2025) https://uk.pcmag.com/ai/161322/ai-use-in-call-of-duty-black-ops-7-draws-fire-from-us-lawmaker accessed 26 November 2025.
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7.  Jamie Hore, ‘Activision confirms Black Ops 7 uses gen-AI tools for assets, says they help “empower” its teams to “create the best gaming experiences possible”‘ (15 November 2025) https://www.pcgamesn.com/call-of-duty-black-ops-7/ai-assets-steam-disclosure accessed 26 November 2025.
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8.  Connor Makar, ‘Even members of the US Congress are pushing back against Call of Duty: Black Ops 7’s AI use’ (17 November 2025) https://www.eurogamer.net/even-members-of-the-us-congress-are-pushing-back-against-call-of-duty-black-ops-7s-ai-use accessed 25 November 2025.
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9.  GDC, ‘GDC 2025 State of the Game Industry Report’ (2025) https://reg.gdconf.com/state-of-game-industry-2025 accessed 24 November 2025.
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10.  Chip Law Group, ‘The Role of IP in the Gaming Industry: From Copyright Protection to Patent Wars’ (17 January 2025) https://www.lexology.com/library/detail.aspx?g=996bfdec-3735-42d8-8cc9-d7734fb55f37 accessed 24 November 2025.
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11.  DLA Piper, ‘Games Saw It Coming: Decoding Generative AI’ (17 July 2025) https://www.jdsupra.com/legalnews/games-saw-it-coming-decoding-generative-3115093/ accessed 25 November 2025.
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12.  Pinsent Masons, ‘Getty Images v Stability AI: Getty’s copyright case against Stability AI fails’ (4 November 2025) https://www.pinsentmasons.com/out-law/news/gettys-copyright-case-against-stability-ai-fails accessed 24 November 2025.
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13.  Richard Barker and Issabella Cardu, ‘Gen AI and copyright in Europe – Munich Regional Court seeks to determine the rules of the playing field’ (25 November 2025) https://thelens.slaughterandmay.com/post/102lvwk/gen-ai-and-copyright-in-europe-munich-regional-court-seeks-to-determine-the-rul accessed 25 November 2025.
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14.  ibid.
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15.  Brendan M. Palfreyman, ‘Things to Think About Before Signing That AI Vendor Contract’ (27 August 2024) https://www.harrisbeachmurtha.com/insights/things-to-think-about-before-signing-that-ai-vendor-contract/ accessed 25 November 2025.
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16.  United States Copyright Office, Compendium of U.S. Copyright Office Practices, Third Edition, ch 300, p 7 https://www.copyright.gov/comp3/chap300/ch300-copyrightable-authorship.pdf accessed 24 November 2025.
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17.  Stuart D. Levi, Jordan Feirman and Mana Ghaemmaghami, ‘Appellate Court Affirms Human Authorship Requirement for Copyrighting AI-Generated Works’ (21 March 2025) https://www.skadden.com/insights/publications/2025/03/appellate-court-affirms-human-authorship accessed 26 November 2025.
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18.  Information Commissioner’s Office, How to use AI and personal data appropriately and lawfully (November 2022) p 10 https://ico.org.uk/media2/migrated/4022261/how-to-use-ai-and-personal-data.pdf accessed 25 November 2025.
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19.  Laura Craig and Miles Harmsworth, ‘AI, data and gaming’ (31 July 2023) https://www.taylorwessing.com/en/interface/2023/ai-and-video-games/ai-data-and-gaming accessed 24 November 2025.
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20.  General Data Protection Regulation, Regulation (EU) 2016/679 [2016] OJ L 119/1, art 6.
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21.  Craig and Harmsworth, ‘AI, data and gaming’ (n 19).
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22.  Ogier, ‘The Evolving Landscape of Personal Data in International Sports: Athlete Activism and Commercial Monetisation’ (November 28, 2024) [https://www.ogier.com/news-and-insights/insights/the-evolving-landscape-of-personal-data-in-international-sports-athlete-activism-and-commercial-monetisation/#:~:text=%22Project%20Red%20Card%22%20encompasses%20claims,professionals%20have%20joined%20the%20claims.] accessed 26 November 2025.
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23.  Information Commissioner’s Office, ‘How do we ensure individual rights in our AI systems?’ (March 2023) https://ico.org.uk/for-organisations/uk-gdpr-guidance-and-resources/artificial-intelligence/guidance-on-ai-and-data-protection/how-do-we-ensure-individual-rights-in-our-ai-systems/ accessed 24 November 2025.
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24.  ibid.
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25.  B. Merchant, ‘AI Is Already Taking Jobs in the Video Game Industry’ (23 July 2024) https://www.wired.com/story/ai-is-already-taking-jobs-in-the-video-game-industry/ accessed 26 November 2025.
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26.  GDC, State of the Game Industry Report (n 9).
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27.  Cole Watson, ‘REPORT: Layoffs and AI are major concerns in the gaming industry’ (22 January 2025) https://kidscreen.com/2025/01/22/report-layoffs-and-ai-are-major-concerns-in-the-gaming-industry/ accessed 24 November 2025.
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28.  Makar, ‘members of the US Congress are pushing back’ (n 8).
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29.  Techzim, ‘90,000 tech jobs lost by May 2025: Junior devs at risk’ (June 2025) https://www.techzim.co.zw/2025/06/90000-tech-jobs-lost-by-may-2025-junior-devs-at-risk/ accessed 26 November 2025.
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30.  Sean Rankin, ‘Benefits of AI (Artificial Intelligence) in Gaming’ (25 July 2023) https://medium.com/@icorp100/benefits-of-ai-artificial-intelligence-in-gaming-b69d92b6e674 accessed 26 November 2025.
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31.  ibid.
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