The studio behind the Postal series just announced a partnership with Goonswarm Games to develop a brand new Postal game—only to cancel it shortly after. The reason? Goonswarm was accused of using generative AI.

Adding to the drama, Goonswarm Games has now announced it is shutting down completely.

The use of AI tools in creative industries has always been controversial, and this is an extreme case: from announcing the collaboration to canceling the project and then the company going under, the whole process happened so fast it’s hard to keep up. The game development community is clearly more sensitive to AI use than many expected—being labeled as “AI-generated” can have fatal consequences.

Both Web3 and AI talk about “decentralized creation,” but the reality is that the community’s acceptance of these technologies varies greatly. Some see AI as a tool for efficiency, while others consider it a betrayal of creators. Goonswarm’s experience shows that no matter how advanced the technology is, if it’s not accepted, it amounts to nothing.