AI in Games: Generative NPCs, Assets and Steam Rules — 2026-09-08
Square Enix detailed its "full-scratch" 3D generative AI training at CEDEC2026, while a Dragon Quest fan proposal for AI-generated merchandise sparked significant backlash over revenue sharing demands. Meanwhile, new data indicates AI disclosures on Steam are accelerating, with some weeks seeing 40% of new releases flagging generative content.
AI in Games: Generative NPCs, Assets and Steam Rules — 2026-09-08
Top developments
Square Enix Details "Full-Scratch" 3D Generative AI Training
At the CEDEC2026 conference (held July 22–24, reported on September 1, 2026), Square Enix researchers presented their development of a 3D generative AI model trained exclusively on the company’s own proprietary assets. This "full-scratch" approach aims to bypass copyright issues associated with scraping public datasets, allowing the studio to generate consistent 3D assets that align with their specific artistic style for future titles.
Fan Proposal for AI Dragon Quest Dioramas Sparks Backlash
A controversy erupted in early September 2026 after a fan proposed selling AI-generated Dragon Quest dioramas, demanding a 3% revenue share from Square Enix for commercialization rights. The proposal was met with severe criticism from the community regarding both the use of generative AI for official IP merchandise and the financial terms, highlighting growing tensions between fan creativity, corporate IP protection, and AI ethics.
Steam AI Disclosure Rates Accelerate to 40% Weekly Peak
Recent analysis shows that AI disclosure rates on Steam are climbing faster than previously projected. While early 2026 data showed ~20% of new releases carrying disclosures, reports from June and July 2026 indicate that in some single-week periods, up to 40% of new games launched with generative AI disclosures. This surge underscores how quickly developers are adopting these tools despite player skepticism.
Local view
Japanese Media Focuses on Proprietary Asset Training
Japanese tech media, specifically GameBusiness.jp, is closely following Square Enix’s internal AI strategies, emphasizing the shift toward training models on "zero-from-scratch" proprietary data rather than public web scrapes. This reflects a broader industry concern in Japan about copyright law and the desire to maintain unique artistic identities in an era of commoditized generative assets.
Chinese Press Highlights Efficiency Gains vs. Industry Shakeup
In China, outlets like SMZDM (What's Worth Buying) are reporting on the economic fallout of AI adoption in adjacent creative fields, such as short dramas, where prices have dropped by over 90% due to oversupply of low-quality AI content. This serves as a cautionary tale for game studios considering full-scale AI replacement of human artists, with discussions focusing on the risk of market saturation and reduced perceived value.
Context & numbers
- Disclosure Surge: By the end of 2025, 4,311 Steam games carried AI disclosures; analysts project this will exceed 7,000 by the end of 2026. Recent weekly peaks show 40% of new releases disclosing AI use.
- Developer Sentiment: According to GDC 2026 data, 36% of game industry professionals use generative AI personally, but 30% view it as a net negative for the industry, reflecting a cooling sentiment as the initial hype fades.
On the radar
- Post-Strike Voice Acting Norms: With the SAG-AFTRA video game strike settled in July 2025, studios are now navigating the practical implementation of AI voice protections. Watch for early 2027 contracts from major publishers to see how strictly they adhere to the "consent and compensation" clauses negotiated during the strike.
- CEDEC Follow-ups: Expect more Japanese studios to announce specific "proprietary-only" AI training pipelines in Q4 2026 as they respond to Square Enix’s transparency initiative and ongoing copyright debates in Japan.
This content was collected, curated, and summarized entirely by AI — including how and what to gather. It may contain inaccuracies. Crew does not guarantee the accuracy of any information presented here. Always verify facts on your own before acting on them. Crew assumes no legal liability for any consequences arising from reliance on this content.
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