Take-Two, EA Warn Of “Reputational” Risks Involving AI

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A significant number of prominent video game developers are incorporating artificial intelligence into their game creation and additional projects. Recently, Electronic Arts (EA) and Take-Two Interactive Software have cautioned shareholders about potential damage to their reputation.

It was observed by Bloomberg that in their recent 10K filings, both companies have included warnings about potential risks associated with Artificial Intelligence. For instance, Electronic Arts’ filing highlights the company’s use of AI for development and business operations, stating that this integration could raise social and ethical concerns.

If EA doesn’t handle these matters skillfully, it may result in potential legal troubles and damage to its reputation. Consequently, consumers might lose trust in the company and its brands.

In simpler terms, the document from Take-Two indicates that integrating artificial intelligence into our products could potentially pose both operational and public image challenges.

Companies like EA and Take-Two are sharing this information due to the obligation for publicly traded firms to disclose all substantial risks to their investors, which may encompass scenarios such as pandemics or hurricanes.

In essence, Daniel Ahmad from Niko Partners stated that it’s now widespread for companies like EA, Take-Two, and others to inform investors about the growing use of Generative AI in video game development. This practice is driven by potential risks involved, as most major game developers, including Nintendo, are currently exploring this technology (primarily at the concept stage rather than implementing it in-game). Legally, they must disclose any business-affecting risks associated with this experimentation.

In their filing, Take-Two highlighted some additional risk factors such as potential network outages, over-reliance on Grand Theft Auto (GTA), negative effects from ESRB ratings on sales, and internet regulations, to name a few. On the other hand, Electronic Arts (EA) revealed other risks such as pandemics, acts of terrorism, and natural disasters in their disclosure.

To put it simply, when companies like Take-Two, EA, and others express worries about AI, it’s a recognition that the employment of generative AI could have various outcomes. Interestingly, a recent study has shown that a significant number of game developers worldwide are currently utilizing AI technologies, even though there may be worker apprehensions regarding their use.

Companies such as EA and Microsoft forecast that the progress in artificial intelligence (AI) tools and technologies may initially result in job redundancies, but over time, it could lead to increased employment opportunities. In the opinion of Strauss Zelnick, CEO of Take-Two, AI systems will aid in streamlining game development, making it more efficient, although they won’t necessarily reduce costs. Moreover, he emphasized that machines cannot replicate the “creative ingenuity” found in human minds.

Earlier on, Zelnick pointed out that the term ‘artificial intelligence’ is misleading since machines don’t learn – people do. He further explained that these terms serve as simple explanations to humans of what appears as magic. Essentially, he stated that these are digital tools, and we’ve been using them for a long time. Zelnick expressed confidence that the current concept of AI will enhance our business operations and improve our work quality, but it won’t lead to job loss.

In recent times, companies like Take-Two, EA, Microsoft, among others, who have adopted AI technology, have simultaneously reduced their workforce by hundreds. However, it’s unclear if any of these job reductions are directly linked to AI.

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2025-05-27 18:09