Capcom's New AI Venture Gets Lost in Translation

Hello and welcome to this week’s edition of AI and Games. I’m feeling pretty under the weather this week sadly as some plague has descended upon our house somehow.

This week will be a little shorter than usual given I am propped up on a variety of drugs but still wanted to get something out to you. With a focus on the Capcom’s comments last week on their planned updates to their proprietary RE engine that were misrepresented by a lot of the gaming press and social media.

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Announcements

Couple of quick announcements for you, including another Tommy sighting in the wild next week. Provided I shake off this horrid cough…

Join the Game AI Events Team @ Game Republic New Horizons

Very excited to say that this time next week myself and fellow AI and Games Conference founders Duygu Cakmak and Matthias Siemonsmeier will be at Game Republic New Horizons! Running from 14th-16th October in sunny Middlesborough, we’re doing something we’ve never actually tried before: speaking together on stage! We promise a fun panel as we dig into the current state of AI in the games industry in 2026. Expect some strong opinions, and a friendly bit of banter among friends.

AI and Games Conference 2026

Oh good grief we’re only five weeks out: five weeks! It’s all systems go here at AI and Games HQ as myself, Shraddha, Sally, and the rest of the team are all chipping away at the 101 things we need to do to get ready for this years event. Don’t forget to grab your tickets if you haven’t already. But for now, here’s more talk announcements!

Cheat Codes and Compliance Codes
The Legal Playbook for AI and Games in 2026
Rupam Davé / Lewis Silkin

We’re pleased to welcome back Rupam Davé to talk once again about the ever-evolving legal landscape surrounding Machine Learning and Generative AI and its adoption in the video games industry. Rupam’s presentations have continued to prove popular each year at the conference, and he now holds the record as the longest-serving speaker at the AI and Games Conference having presented in 2024 and 2025.

From Multiplayer to Single Player: Shipping Generative AI Temps in Dimensional Double Shift
Brian Tanner and Alex Kearney / Artificial Agency

Dimensional Double Shift is a co-op VR title released for the Meta Quest where players have to work together and coordinate around complex tasks. However, what would the circumstances need to look like for this to ship AI teammates? Alex and Brian from Artificial Agency dig into how this was achieved using small-scale Generative AI agents in the cloud, albeit capped to operate within a hard two-second window. With insight into how to operate three concurrent agents all while ensuring they run at significantly smaller inference costs than your typical GenAI models.

Perception and reaction systems for large amounts of NPCs
Alejandro Moya / Grip Studios

Last but most certainly not least for this week’s announcements we welcome Alejandro Moya from Grip Studios who in recent years have been co-developers on titles such as Subnautica, Mafia: The Old Country, and Marvel’s Midnight Suns. Moya will be sharing their insights into building perception systems for large numbers of NPCs in ways that scale in practical and sensible ways. Something of a spiritual sequel to the fantastic perception talk from Vadim Petrov of Warhorse Studios in 2025.

AI (and Games) in the News

Some headlines in brief:

• SEGA is insistent that they’re being “very cautious” around the use of AI in creative works.

• Call of Duty creators Activision discuss how cheating is now an $8.5 billion industry and AI is certainly contributing to that issue. A point we need to discuss on our case study series in the future.

• Base PS5’s are now getting their own version of AI upscaling courtesy of Quick Spectral Super Resolution (QSSR) rolling out for Wolverine and Ghost of Yotei.

• Micron celebrates higher prices for customers and record profits as RAM supply expected to worsen in 2027.

• Google announces their new Playground platform, essentially their own AI game engine creator.

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Capcom Announces Updates to RE Engine, and Everyone Overreacts

Last week was Capcom’s own in-house tech conference Capcom Open Conference RE: 2026, and a big part of that event was discussions around the future of the RE engine. However, while the games industry has been enthralled by their releases in recent years ranging from Resident Evil: Requiem to Street Fighter 6, Pragmata, Monster Hunter: Wilds and more recently Onimusha: Way of the Sword, folks were up in arms about the suggestion that they’re transforming the engine into a system built for Generative AI games. An issue that stemmed both from again misunderstandings of how AI works in games, but also a fundamental issue of translation.

Expanding the RE Engine

The ‘REach for the moon’ Engine - that’s right kids, it doesn’t stand for Resident Evil - is the successor to the MT Framework and has been used in production since Resident Evil 7: Biohazard released in 2017. It’s since been used for virtually all of Capcom’s titles in recent years, including all of the titles mentioned above as well as the modern reboots of classic Resident Evil games. During the conference there was a presentation by programmer Satoshi Ishida entitled “The Outlook and Future of the ‘REX’ Project”. REX is the codename given to the next generation version of the RE engine (dubbed ‘RE neXt Engine’) which has been in development since at least 2023.

During the presentation Ishida gave a brief discussion of some of the major challenges faced by developers at the studio. Notably that many simple tasks can prove time consuming and onerous, and that the engine needs to become easier to use as the number of devs on a given project increases. Hence their solution is to integrate AI tooling into future workflows. The intention being to update the engine to allow for more effective integration of AI models for areas such as editor tools, development support, and quality assurance.

This has led to the creation of new components to the RE engine, all of which integrating AI in some form or another. Note that none of these components are AI modules in themselves, but are described as potentially integrating AI models in their efforts to be more efficient. Now this all makes sense. Both given there are a variety of machine learning models already used in some aspects of game development, but there is also potential for them to integrate LLMs to support in specific tasks. Ishida gave some examples in the talk such as translating data from various file formats and syntaxes, to performant code generation based off visual editing workflows.

While Capcom remain cagey about embracing Generative AI for assets, the integration of machine learning and potential generative models to support common tasks of the dev team sounds like a much more reasonable and sensible approach - even compared to some of the more egregious examples of public engines like Unreal Engine 6. This strikes me as a more sensible adoption of AI into workflows given it appears to be driven by their own experiences of actually shipping content with their engine.

Lost in Translation

Now I first caught wind of this while on a short vacation and seeing the IGN story being bounced around with a lot of sensational rhetoric around this being how Capcom now embraces GenAI in their games. Though I really read this as far removed from such an assessment. What Ishida describes is changing parts of a workflow to now integrate AI tools to support an existing process, rather than merely supplant it - and the humans involved - with AI tooling.

But perhaps the other key aspect of what drove this misunderstanding outside of the most folks lack of understanding of AI’s use in games, is a sentence in the report by GameBiz which when machine-translated into English reads like this:

Ishida commented that these technological advancements will ultimately lead to the larger goal of evolving into an "AI-generation game engine."

This appears to be where many a headline such as those by Eurogamer and IGN emerged from, but I think this has been misread as ‘an engine that generates games with AI’ rather than simply ‘an engine updated to reflect the current era of AI technologies’.

This was later corroborated by folks more fluent in Japanese than I am. Notably John Linneman over at Digital Foundry who pointed out that the term ‘generation’ in this translation is in reference to an epoch. This is an ‘age of AI’ - a generation if you will - and not referring to the use of AI as a means to generate content.

Note: Eurogamer has since amended the story and removed the original social media post implying that the engine is focussed on AI-generation.

So what this means in the future we’ll still waiting to see. But I do believe that this is a headline that’s been blown out of proportion once again as a result of a lack of understanding of AI integration. Though admittedly there was a language barrier this time around!

Wrapping Up

Okay, yup… that’ll do. I need more drugs. Catch you next week!

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