Gaming’s AI crossroads: PUBG maker leans in, Palworld pushes back. Here’s what’s going on.

Krafton, the company known for PUBG and recently the acquirer of Tango Gameworks, is heavily investing in “Agentic AI” and automation. This decision is raising concerns about potential job losses, as the technology could replace some human roles.

Meanwhile, the creators of Palworld, Pocketpair – who are currently facing a lawsuit from Nintendo – are doing things differently. They’ve announced they won’t use AI at all in their new publishing arm. This is a notable move, especially as companies like Microsoft invest heavily in AI and automation becomes increasingly common in the gaming industry.

Inside Krafton’s ‘AI First’ transformation

Krafton announced a significant change in how it does business through a recent press release. The company plans to deeply integrate AI, not just as a tool, but by reorganizing around it. Their aim is to implement “Agentic AI” – AI systems that can independently set objectives, create plans, and perform routine tasks and analysis.

The company is investing about 100 billion won (roughly $72 million) to create a large GPU cluster using NVIDIA’s newest B300 AI chips.

As a tech enthusiast, I’m really excited about what Krafton is doing. They’re aiming to let developers ditch the repetitive tasks and really focus on the fun stuff – being creative and tackling the big challenges in game development. Their plan has three main parts: they’re teaching everyone internally about AI and running ‘hackathon’ style events to explore it, they’re changing how their teams are structured to have dedicated research groups, and most importantly, they’re taking the time they save through automation and putting it straight into making even *more* new games. It’s a smart move, honestly.

Starting in 2026, the company will dedicate approximately $22 million annually – a total of 30 billion won – to help its employees learn about and try out AI tools firsthand.

Krafton is the company that created PUBG, the incredibly popular battle royale game. They also recently purchased Tango Gameworks, the studio known for games like Hi-Fi Rush and Ghostwire: Tokyo. Previously, Tango Gameworks was part of Microsoft and was impacted by their recent layoffs. This acquisition by Krafton allows the talented team at Tango Gameworks to continue making games.

This isn’t something far off in the future. Krafton aims to have its AI platform and management systems working throughout the entire company by the latter half of 2026.

Palworld’s stand against generative AI

While Krafton is focusing heavily on artificial intelligence, the team behind the popular game Palworld, Pocketpair, has decided not to use generative AI at all.

In early 2025, Pocketpair started its own publishing branch and was immediately flooded with over 150 game proposals. The new division is led by John Buckley, who is known for his skepticism towards artificial intelligence. Because of this, his team has decided not to publish any games that incorporate generative AI, Web3 technology, or NFTs.

In 2024, Palworld was accused of using assets created by artificial intelligence, but the developers at Pocketpair denied these claims. Now, as discussed by Valve’s Gabe Buckley at Gamescom Asia, we can expect a surge of poorly made games created using AI to appear on platforms like Steam – and this is already beginning. Thankfully, Steam now requires game developers to state when they’ve used AI in their projects.

It’s encouraging that Pocketpair is clearly opposing practices that could stifle creativity in gaming, particularly as AI becomes more common. This is a significant difference from how Krafton is handling things, and it highlights the growing disagreement within the game industry about how AI should be used in making games.

The growing divide over AI in game development

Krafton and Pocketpair highlight a growing concern in the gaming industry. With Microsoft leading the way by integrating AI into games like Call of Duty, and Krafton focusing heavily on AI development, some are worried this trend could set a problematic example for other companies.

Pocketpair is a great example of how smaller, independent game studios can thrive without relying on AI to speed up development or cut costs. In fact, these studios often succeed *because* of their unique and genuine approach, not in spite of it.

On X (formerly Twitter), there’s a lot of negative reaction to AI, similar to the criticism we saw with NFTs. Many posts speaking out against AI are gaining popularity, and it seems like a lot of people feel companies are insensitive and disconnected when they use AI to replace employees.

FAQ

What does Krafton mean by an “AI-first” vision?

Krafton is adding artificial intelligence throughout its game-making process, including creating game elements and designing how the games are played. This is intended to make development faster, more innovative, and easier to expand.

Why is Palworld’s studio rejecting AI?

The creators of Palworld have announced they won’t be using artificial intelligence in their development process. They’re worried about maintaining the originality of their work, preserving artistic quality, and protecting the jobs of human artists and developers.

Is this divide common in the gaming industry?

Studios are facing a growing divide: some are quickly adopting AI to make development faster and more efficient, while others are hesitant, wanting to maintain the quality of handmade work and protect jobs.

What are the risks of going “AI-first”?

Some people worry that depending too much on AI might result in similar-looking content, raise ethical issues about the data used to train AI systems, and limit work for artists and designers.

2025-10-23 17:40