NetEase Games has denied claims that it shut down its generative AI research department and banned the technology across its studios. Japanese developer Goichi Suda (Suda51) publicly stated that NetEase had folded its AI division and told all development teams to stop using generative AI entirely. NetEase says none of that happened.
In fact, the company has two AI talks scheduled at GDC 2026 next month and is already shipping AI features in live games.
Suda51's Claims
Suda51, creator of Romeo is a Dead Man, sat down with Eurogamer to discuss his upcoming game. He confirmed his new title doesn't use AI, then claimed NetEase had turned against the technology company wide.
"As far as not using any AI for our games, it started as a Netease policy for all their companies," Suda51 said. "They originally had a section researching and developing AI related stuff, but at one point they decided not to do that any more. They folded that section and told their studios to not use AI in games, to not use it at all."
He did leave room for the technology's future, saying generative AI could eventually become "really cool." For now, though, he feels "there's something about the images and videos you see that feels off."
NetEase Fires Back
NetEase responded quickly and bluntly across multiple outlets. A spokesperson told Eurogamer: "The assertion that NetEase Games has closed an AI department or that we've mandated teams or studios not to use AI is not true."
An even shorter statement went to Insider Gaming: "The situation described did not occur."
A NetEase representative told FRVR: "This story isn't true, we even have a GDC talk about AI."
GDC 2026 Talks Point to Continued Investment
NetEase's denials aren't just words. GDC 2026's schedule for March lists two AI presentations from NetEase employees, featuring a game AI designer, a technical manager, and a technical art manager.
One talk, set for midday on March 12, is called "How AI Turned MMO Players into TikTok Creators." It covers using AI video tools to "extract motion and camera, swap avatars, and refilm the scene" from live action clips or gameplay footage for short form video content.
A second presentation later that day takes a wider look at AI in development. Its summary promises to "explore principles for successful AI integration: establishing effective human AI collaboration workflows, building value oriented technical services, and creating cross domain integration strategies."
NetEase also plans to show real financial impact. According to the talk's description, the company will "demonstrate how AI asset optimization toolchains and intelligent workflow transformations delivered over $6 million in cost savings and 50% efficiency improvements." Both talks emphasize "AI implementation opportunities in game development" and "specific techniques for leveraging AI in art production."
AI Already Running in NetEase's Live Games
Some of NetEase's current titles already use the technology in production. Where Winds Meet, published by NetEase and developed by Everstone Studios, incorporates generative AI across several features in its open world action game.
Everstone confirmed in a recent interview that AI plays a role in areas players might not immediately notice. AI facial recognition generates character faces from user portraits, and AI powered NPCs populate the game's world.
"In game development, we've always taken an open and collaborative approach, actively following and carefully evaluating the potential of cutting edge technologies like AI," Everstone Studios said in a written response.
On specific applications, the studio added: "At the moment, our team mainly uses AI as a supporting tool in specific areas, for example, in our facial modeling system, which allows multi level parameter adjustments. Players can also use voice input for AI voice tone recognition, generating character appearances in different styles, ages, and ethnicities, making true personalization possible."
Generative AI Remains a Flashpoint Across Gaming
Suda51's claims spread fast, and for good reason. Generative AI is one of the most divisive topics in the industry right now. Call of Duty: Black Ops 7 caught heavy criticism for low quality AI generated art, and that backlash pushed a growing number of studios to draw hard lines against the technology.
Larian Studios banned AI use for Divinity's development after fan pushback. Jagex restricted generative AI across RuneScape. Games Workshop blocked it entirely to "protect our human workers."
Messaging from some of the biggest publishers has been mixed. Take-Two CEO Strauss Zelnick called AI a "great thing for every industry," but the company was quick to state that "generative AI has zero part in what Rockstar Games is building" with GTA 6.
Hooded Horse, the publisher behind Manor Lords, took the hardest stance of any. Its CEO declared: "If we're publishing the game, 'no f***ing AI assets'" and called generative AI "cancerous."
A Misunderstanding, Not a Policy Change
Suda51's statements appear to be a misunderstanding rather than any real shift in how NetEase approaches AI. Between direct corporate denials, a full GDC lineup, and AI features already live in Where Winds Meet, NetEase's position on the technology is clear.
That said, how quickly these claims spread and how much attention they drew reflects the current state of the industry. Every major company's stance on generative AI is being watched closely by developers and players alike, and that level of scrutiny shows no sign of fading.
