TLDR: A recent report from Japan’s Computer Entertainment Supplier’s Association (CESA) indicates that 51% of Japanese game companies are now utilizing generative AI in their development processes. The primary applications include visual asset creation, story and text generation, and programming support. Additionally, 32% of these companies are actively developing their own in-house AI engines.
The landscape of game development in Japan is undergoing a significant transformation, with generative artificial intelligence (AI) rapidly becoming an integral part of the industry. According to a preview of the ‘2025 CESA Video Game Industry Report,’ released by Japan’s Computer Entertainment Supplier’s Association (CESA) on September 25, over half of the country’s game companies have embraced generative AI technologies.
The report, which surveyed 54 Japanese game companies between June and July 2025, found that approximately 51% are currently using generative AI in their development workflows. This widespread adoption highlights a strategic shift within the industry to leverage AI for enhanced efficiency and creativity.
The most commonly cited applications of generative AI are in the creation of visual assets, such as characters and background images, followed closely by story and text generation. Programming support also stands out as a significant area where AI is being utilized. Beyond these applications, a notable 32% of the surveyed game companies are investing in the future by developing their own in-house AI engines, signaling a deeper commitment to integrating AI at a foundational level.
Major players and independent studios alike are exploring and implementing these technologies. For instance, Level-5, known for titles like ‘Professor Layton’ and ‘Yo-Kai Watch,’ has openly discussed its use of Stable Diffusion for upscaling assets, generating reference images for artists, and creating elements of in-game backgrounds. They also employ GitHub Copilot for coding assistance. Capcom’s technical department has been experimenting with generative AI models such as Gemini Pro, Gemini Flash, and Imagen to brainstorm and prototype background assets, aiming to free up developers’ time to focus on core game quality. Sega has also established an internal ‘Generative AI Committee’ to systematically integrate AI tools into various aspects of its development, including animation, graphic design, and coding.
However, not all industry giants are rushing into full-scale AI adoption. Nintendo, for example, is reportedly taking a cautious ‘wait-and-see’ approach, primarily due to concerns surrounding intellectual property rights. This highlights the ongoing legal and ethical considerations that accompany the rapid advancement of AI in creative industries.
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Overall, the CESA report underscores generative AI as a transformative technology in game development, promising significant productivity gains and new creative possibilities, while also prompting crucial discussions about its responsible implementation.
