Epic Games CEO Tim Sweeney has thrown a grenade into the discourse surrounding Artificial Intelligence in video games. His target is Steam’s policy of mandating disclosure labels for games that use generative AI, and his verdict is blunt: “It makes no sense.”
While critics might dismiss this as typical billionaire contrarianism or a defense of his own Unreal Engine ecosystem, a closer examination suggests something else: Sweeney is looking further down the road than everyone else. He is arguing that treating AI as a “hazardous material” that requires a warning label is a fundamental misunderstanding of how software is built. And he is correct.
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Sweeney’s critique, delivered via a sharp thread on X (formerly Twitter) this week, cut through the technical jargon with a sarcastic analogy. If the industry insists on labeling the tools used to make a game, he argued, we are on a slippery slope to absurdity.
“Why stop at AI use?” Sweeney posted. “We could have mandatory disclosures for what shampoo brand the developer uses. Customers deserve to know lol.”
The humor masks a serious point about utility. We do not demand developers disclose if they used Photoshop to edit textures, or if they used Visual Studio to write code. Sweeney’s point is that Generative AI is rapidly becoming just another utility in that same stack.
Perhaps the strongest argument against these labels lies in the history of gaming itself. We often forget that “AI” has been a foundational pillar of video games for forty years.
Since the days of Pac-Man, developers have used artificial intelligence to control non-player characters (NPCs). When an enemy in a stealth game investigates a noise, or when a racing game adjusts the difficulty of opponent drivers, that is AI. We don’t demand a warning label for “Smart Enemy AI” – in fact, we celebrate it.
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The current controversy draws an arbitrary line in the sand. It suggests that when algorithms are used for logic and behavior (NPCs), it is acceptable innovation. But when algorithms are used for visuals and assets (Game Art), it suddenly requires a disclaimer.
Sweeney’s stance suggests this distinction is meaningless. Whether the computer is generating a path for a monster to walk on, or generating the texture for the monster’s skin, it is simply code assisting the developer. If we didn’t label the former, there is little logic in labeling the latter.
Sweeney is correct because he is judging the technology based on its trajectory, not its current controversial infancy.
Steam’s policy (and the player backlash it seeks to mitigate) currently treats Generative AI as an external alien force. But in game development, it is already becoming the mortar that holds the bricks together.
If a developer uses an AI-powered “content-aware fill” to extend a background texture, does that warrant a “Made with AI” warning? If an AI helps squash a bug in the physics engine, does the consumer need to be notified?
Sweeney’s argument is that soon, the answer to “Does this game use AI?” will be “Yes” for 100% of titles on the market. At that point, a warning label becomes noise.
Policies built on temporary fears rarely age well. Steam’s current labeling policy is a reaction to fear – fear of copyright theft, fear of job losses, and fear of “low effort” asset flips. These are valid concerns for today, but they are stopgaps.
Sweeney is betting on a future where AI is simply the new standard for efficiency. Labeling it creates a false dichotomy between “Human Games” and “AI Games,” a line that is already blurring beyond recognition. Sweeney is right: judge the game by how it plays, not by the brand of digital shampoo the developers used to clean up the code.
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