The latest State of the Game Industry survey from the newly rebranded GDC Festival of Gaming paints a complex picture: more than half of developers say generative AI is hurting games, Unreal has pulled ahead of Unity as the top development engine, and layoffs continue to shape careers and studio strategies. Here’s what stood out, why it matters, and how it might affect your next project.
If you’ve felt the industry shifting under your feet, you’re not alone. The 2026 survey—completed by 2,300 professionals across roles and studio sizes—captures a year where tech choices, AI anxiety, and career concerns collided. While not every trend will surprise you, the scale and direction of change feel different this time.
Key takeaways at a glance:
- 52% say generative AI is having a negative impact on the industry; only 7% see it as a net positive.
- Unreal Engine now leads as the primary development engine at 42%, ahead of Unity at 30%.
- Layoffs remain a defining experience: over a quarter of respondents have been affected in the last two years, with nearly half of those still searching for work.
- Unionization support is strong among US respondents, with most not currently unionized but interested in joining.
- AI usage is uneven: heavier in business functions and upper management, lighter among hands-on studio roles.
The mood on generative AI: protective instincts rising The debate around gen AI has moved from experimental curiosity to protective caution. A majority of respondents view it as harmful, with opposition particularly strong among artists, designers, and programmers. The concerns aren’t just philosophical—they’re practical. Developers cite murky data sourcing, the environmental cost of large models, quality risks, and the threat of role erosion. Even among those open to AI, there’s a clear preference for tightly scoped use cases: code assistance, prototyping, and other non-creative support work. Only a small slice of the industry describes gen AI as broadly beneficial, and that optimism skews toward executives and business operations.
What does this mean on the ground? Expect teams to formalize boundaries. Studios that allow AI will likely set rules around training data, attribution, and pipeline checkpoints, while others will avoid gen AI entirely—especially in content creation. If you’re a developer, it’s worth aligning early with your team’s stance to avoid rework and ethical gray zones later in production.
Unreal vs. Unity: a decisive shift, not a total switch For the first time, Unreal Engine has a clear lead as the primary engine across respondents. The context matters, though. Adoption is strongest in AA and AAA spaces, where fidelity, toolchains, and hiring pipelines make Unreal a natural fit. Newer indies are also leaning into UE, while more established indie teams still favor Unity, particularly for projects built around smaller scopes or free-to-play strategies.
The takeaway isn’t that Unity is fading—it’s that teams are choosing more deliberately. If you’re targeting high-end visuals, multiplayer shooters, or feature-rich, cinematic experiences, Unreal’s ecosystem is hard to beat. If you’re shipping on a lean budget, want fast iteration, or are targeting mobile or 2D-heavy experiences, Unity remains deeply viable. Godot, meanwhile, continues to make quiet inroads among newer indies who value open tooling and community-driven development. Keep an eye on that momentum if you’re prototyping a lightweight project or want full control over your stack.
Layoffs: the reality check that won’t go away Layoffs continue to define the lived experience of game development. A significant share of respondents have either lost their jobs recently or worked at companies that downsized, and many haven’t found their next role yet. AAA studios report the highest exposure to workforce reductions, while indies—though not immune—appear somewhat more insulated.
This has two immediate impacts. First, career planning is getting more conservative. Developers are prioritizing transferable skills, building public portfolios, and diversifying income with contract work or platform grants. Second, teams are scoping smaller and planning longer runways. If you’re a team lead, it’s time to get real about burn rate, milestones, and your core thesis. If you’re an individual contributor, set aside time for upskilling and networking even during stable periods.
Unionization: from “someday” to “how soon?” Support for unionization among US respondents is high, especially among those who’ve experienced layoffs or earn under upper-management compensation levels. While actual participation remains low, interest in joining is broad, suggesting we may see more formal organizing in the coming years—particularly at larger studios where policies and structures are already well-documented. For workers, this could mean better clarity on overtime, crunch, and severance. For studios, it’s a chance to modernize HR practices and align benefits with long-term retention.
AI usage: where the tools actually live The survey shows a split between who talks about AI and who uses it day-to-day. Business teams, marketing, and upper management report higher adoption of AI tools than core development roles. In studios, AI usage is more selective—think code autocomplete, test generation, and quick prototype stubs rather than wholesale content creation. Directors sit in the middle, often evaluating tools but applying them sparingly.
If you’re considering AI in your workflow, learn from that caution. Treat AI like a power tool: great for speed on well-understood tasks, risky for anything that touches your game’s voice, originality, or IP integrity. Document what you use and why. If your studio has no policy, propose one—especially around model provenance and data handling.
What it means for your next project
- Choose your engine on outcomes, not habit. If your pitch leans on spectacle, advanced networking, or a large team, Unreal may give you leverage. If speed, iteration, and mobile are your priorities, Unity still delivers. For small, systems-forward prototypes, Godot is worth a serious look.
- Set clear AI guardrails. Decide where AI is allowed (e.g., code suggestions, QA triage) and where it isn’t (e.g., final art, narrative voice). Make space for experimentation, but put quality and ethics first.
- Build resilience into your schedule. Longer pre-production, smaller vertical slices, and sharper milestones can protect teams from mid-project shocks.
- Invest in people ops early. Whether or not unionization touches your studio, better communication on workload, compensation, and expectations pays dividends in retention and morale.
- Keep your portfolio alive. Even if you’re fully employed, maintain a public body of work—devlogs, playable builds, or breakdowns—that shows your problem-solving chops.
The big picture The industry is recalibrating. The engine landscape is settling into clearer lanes, AI enthusiasm is giving way to cautious pragmatism, and the workforce is pushing for stability after years of turbulence. None of this spells doom—it just demands smarter decisions. Pick tools that match your game, treat AI as assistive rather than generative for creative pillars, and design teams that can weather uncertainty without burning out.
It’s been a hard stretch for many developers. But clarity is power. With a sharper sense of what’s working and what isn’t, 2026 might be the year teams get back to building the kinds of games only they can make—carefully scoped, ethically produced, and unmistakably original.
