Gaming · Tuesday, 8 September 2026

01 Briefing what happened

A new phone chip draws a quarter of each picture and lets AI invent the rest. The first phone using it went on sale in China today.

Arm's Mali G2-Ultra NX shipped today inside the Xiaomi 18 Fold, promising up to four times the frame rate on 2.5 watts. Elsewhere in the games business, Don't Nod may run out of money in January and Sega explained why it abandoned a billion-dollar online game.

the frame rate Arm claims with all three of its AI methods switched on

the picture moves four times as often while the chip draws far fewer real pixels [1]

2.5W

the power the whole phone uses while running it

1.5 watts of that goes to the graphics chip, which is what stops the phone getting hot [1]

3 hours

of 1080p at 60 frames a second, against about 30 minutes before

Arm's Chris Bergey's own comparison with the previous generation of chips [1]

70%

less traffic between the chip and the phone's memory

reaching out to memory is one of the biggest drains on a phone's battery [2]

The lead story — what happened

The Xiaomi 18 Fold went on sale in mainland China today, the first phone carrying Arm's new Mali G2-Ultra NX graphics chip. [1]
Arm is a British company that designs chips and sells the designs to other firms; it builds no phones of its own. [1] Its previous graphics chip is used by Xiaomi, Vivo and OnePlus. [2]
The chip draws only a quarter of one picture for real and lets AI fill in the other three quarters; the picture after that is invented entirely. [2]
Arm claims up to four times the frame rate when its three AI methods run at once. [1]
Chris Bergey, who runs Arm's edge AI business, said a phone can now hold 1080p at 60 frames a second for three hours, where before it managed about 30 minutes. [1]
The whole phone draws no more than 2.5 watts doing it, with 1.5 watts going to the graphics chip. [1]
The reason any of this exists is heat. A phone cannot shed heat the way a console or a PC can, and it runs off a battery all the time. [2]
Arm published the AI networks openly on GitHub and Hugging Face, so a studio can retrain them on its own game. [2]
Deyan Lazarov of Arm's graphics team said Nvidia's rival DLSS 5 software is proprietary and closed, and would blow past a phone's power budget instantly. [2]
Only the upscaling arrives now. Invented frames are due in early 2027 and cleaned-up lighting after that. [1]
Three games are confirmed to use it: Where Winds Meet from NetEase, Infinity Nikki from Infold Games and Arena Breakout: Infinite from Tencent. [1][2]
Inventing frames usually adds a delay between a button press and what you see, a cost Nvidia, AMD and Intel all pay too. [1]

Who is involved

Arm

the British company that designs the chips inside most of the world's phones and licenses those designs out; it built the new graphics chip
Xiaomi

one of China's largest phone makers; its 18 Fold is the first device to ship with the chip, inside Xiaomi's own Xring O3 processor
Chris Bergey

Arm's executive vice president for edge AI, the part of the business covering phones, tablets and laptops; he made the battery-life claim
Deyan Lazarov

a product manager in Arm's graphics team; he set out how the technology differs from Nvidia's
Nvidia

the American chip company whose DLSS software made AI-assisted drawing normal on PCs; Arm is copying the idea and refusing the closed part

How it unfolded

Five years ago Arm starts work on AI-assisted graphics for phones, The Verge reports [1]
Two and a half years ago work begins on this particular chip, Arm's Deyan Lazarov says [2]
Today the Xiaomi 18 Fold goes on sale in mainland China with the chip inside [1]
Early 2027 the method that invents whole frames is due to arrive [1]
After that the method that cleans up lighting follows [1]

Where this points

Watch whether Where Winds Meet, Infinity Nikki and Arena Breakout: Infinite actually ship with it turned on; Arm says more games are coming but will not name them yet.

What is pushing on the whole day

The bar and the word are our reading of how hard each one is pushing today. The arrow is where it is heading. The evidence is in the stories below.

Heat and battery limits High→

a phone cannot shed heat like a console and runs off a battery [2]

Demand for PC-grade looks on phones Building↑

Arm says more mobile games are asking for ray tracing, the lighting method PCs use [2]

Nvidia's lead in AI rendering High↑

DLSS 5 set the method; Arm copies the idea and rejects the closed design [1][2]

Memory costs High↑

three firms make about 90% of the world's memory and AI buyers outbid phone makers [15]

The rest of the day

12 more stories on this beat.

Each with its own sources. None of these is a link to the story above.

02
Don't Nod may run out of money in January

Don't Nod, the French studio behind Life is Strange, told investors it may not be able to keep operating past January 31, 2027 without new outside money. [3] Its cash fell from 15.4 million euros at the end of 2025 to 8 million by the end of July, and revenue dropped 56% year on year. [3] The board approved a plan on September 4 that folds the French operation into a single production line and could cut up to 90 jobs. [3] Two games, Aphelion and P14, could not raise funding. [3]

Why it matters — Ninety jobs is most of a mid-sized studio. Don't Nod's own auditors gave a similar warning in June, after Tencent, its largest shareholder, refused a short-term cash injection. [3]
03
Sega explains why it killed its billion-dollar online game

Sega cancelled Super Game earlier this year, and its president has now explained why. [4] Announced in 2021, it was meant to be an original online game sold worldwide, and Sega said it might spend close to $1 billion on it. [4] Shuji Utsumi, Sega's president, spoke to the Japanese business paper Nikkei. [4] The company believed it had the technology, he said, but found the investment and the daily running of the service would have to grow enormously. [4] He said Sega still thinks there is a business there. [4]

Why it matters — Sega already lost money on one always-online game, Hyenas, cancelled in 2023, and Sony has pulled back from the same bet. [4] The company not backing out is Tencent, which is far larger. [4][11]
04
China's games market passes $50bn for the first time

China's games market grew 5.4% in 2025 to $51.8 billion, passing $50 billion for the first time, according to a new report from the research firm Niko Partners. [5] The firm expects $53.9 billion this year and $59.8 billion by 2030, with 769 million players. [5] Small, quick mini-games are the fastest-growing part: 80% of Chinese players use them, and they take almost a fifth of all mobile game spending. [5] The report also found 66% of players get around China's internet controls to reach games abroad, mostly through overseas servers, speed-up services and VPNs. [5]

Why it matters — Growth of 2.9% a year over five years is slow for a market this size, so Chinese studios are competing for players who already play rather than for new ones. [5]
05
Memory prices keep climbing, and phones are next

Memory is the part of a phone or console that holds what it is working on, and its price has been rising for two years after decades of falling. [15] Three companies make about 90% of the world's supply: Samsung had 39% of the market in the second quarter of 2026, SK Hynix 26% and Micron 25%, according to the research firm Counterpoint. [15] AI data centres buy a stacked, faster version that is harder to make, and pay more for it. [15] Micron's president, Manish Bhatia, said the industry has to build new factories. [15]

Why it matters — The next iPhones are expected to cost more because of this, and console makers buy from the same three firms. [15] Arm's new chip cuts memory traffic by 70%, which is one way around a price nobody can argue with. [2]
06
Tencent calls always-online games its holy grail

Tencent, the Chinese company whose games include Honor of Kings, League of Legends and Valorant, said it is still aiming at live service, meaning games that keep selling things to the same players for years rather than once. [11] Yong-yi Zhu, its vice president for operations, strategy and compliance, said those games build on themselves and give a studio steady income and a community. [11] He said this while other publishers retreat: Sony's live-service push went badly, and Highguard, reportedly funded by Tencent's own TiMi group, shut down. [11]

Why it matters — Three of the biggest always-online games in the world already run on Tencent's money and staff, so keeping one more alive costs it far less than it would cost anyone else. [11]
07
CD Projekt puts its old games' money into new ones

CD Projekt, the Polish company behind The Witcher and Cyberpunk 2077, plans to put most of the cash its older games still bring in straight back into making more games, rather than paying it to shareholders. [12] Its chief financial officer, Piotr Nielubowicz, told Bloomberg the company is at a completely different stage than five years ago, when it bet its fortunes on a single title. [12] Spending on development is now a main consideration when the board decides what to pay out. [12]

Why it matters — Running several projects at once is only possible because the back catalogue keeps selling. A studio with one finished game and no old ones has nothing to reinvest. [12]
08
Capcom turns to games it has not touched for decades

Onimusha: Way of the Sword, Capcom's first main game in that series since 2006, sold over a million copies on its release day. [9] In the press release announcing that figure, the Japanese publisher said it is focusing on re-activating series that have not had a new game recently. [9] It is already doing that with a new Okami and Mega Man: Dual Override. [9] Capcom named no others; Dino Crisis has had no new game since 2003, and there has been no new main Devil May Cry since 2019. [9]

Why it matters — A revival starts with players who already know the name, so it needs less marketing than something new. [9] That matters most in a year when most publishers are cutting staff.
09
Peak's studio starts funding other people's games

Aggro Crab, the studio behind Peak and Another Crab's Treasure, has started a publishing label to pay for other developers' games. [6] It will sign one or two a year, funding projects that need $500,000 or less and can be finished within two years, and has already taken on the platformer Rebounder and the horror game Subway Midnight. [6] Its terms do not require the money to be paid back in full, and it will not hold the final payment back until release day. [6] Peak has passed 20 million players since June 2025. [7]

Why it matters — Publishers usually keep the last payment until launch, which is exactly when a small studio has least money. Removing that changes who can survive a delay. [6]
10
Stronghold's maker becomes a strategy publisher

Firefly, the British studio behind the castle-building series Stronghold, has launched a publishing label called Wuselfaktory, starting with Fool King from the first-time developer Loot Donkey. [8] Firefly is paying for the game and its marketing. [8] Studio head Nick Tannahill said the 50-person team has been self-publishing since 2010, so the marketing and localisation work already exists inside the company. [8] The move came at the suggestion of Devolver, which bought Firefly in late 2021 and has little experience in strategy games. [8]

Why it matters — Two developer-run publishers opened within a week, both paid for by their own hit rather than by an outside investor. [6][8] That is what indie funding looks like when the outside money has gone.
11
Gamescom apologises to developers robbed at its show

Gamescom, the German games trade show, apologised for how it responded when several independent developers had hardware stolen at this year's event. [10] Its first statement said that at an event of this size some people will always try to take advantage, and pointed exhibitors towards bookable stand security and insurance. [10] The organisers now say that criticism of that response was justified, and that a theft can destroy work that took years to build. [10] They are reviewing security for indie exhibitors and holding a roundtable with the shared booths. [10]

Why it matters — Ryan Laley, who makes the game Mimic, had all his laptops stolen and called it a huge blow financially and mentally. [10] The organisers have still not said whether anyone will be compensated. [10]
12
Nintendo runs two showcases in two days

Nintendo is holding two video presentations this week. [13] The first, today, is a 30-minute show for the 40th anniversary of The Legend of Zelda, ahead of a remake of Ocarina of Time and a live-action Zelda film expected next year. [13] The second, tomorrow, is a regular 45-minute Direct about Switch 2 games arriving this winter, followed by a longer gameplay livestream. [13] Nintendo raised the price of the Switch 2 by $50 earlier this year. [13]

Why it matters — Nintendo raised the price of the Switch 2 by $50 this year, and Grand Theft Auto 6 arrives in November. [13] A winter line-up is what Nintendo has to answer both with.
13
Forza Horizon 6 still due on PlayStation this year

Playground Games said Forza Horizon 6 will still reach the PlayStation 5 before the end of 2026, after reports that the version had been dropped from this year. [14] The studio told players planning to buy it on PlayStation to add it to their wishlist and wait for a date. [14] No other detail about the port was given. [14]

Why it matters — Microsoft, which owns Playground, has a narrow window: September and October are already crowded with releases, and November belongs to Grand Theft Auto 6. [14]

02 Lesson why it matters

Why Sega could not try live service in a small way

Some costs are paid in full before the first player arrives, so the same business is out of reach for Sega and routine for Tencent.

The twist

Sega could afford to build the game. What it could not afford was running a worldwide service for years afterwards, and that bill does not get smaller if fewer people show up.

How it works

Some businesses charge their whole cost before the first customer
An always-online game needs servers, staff and updates from day one
That bill is the same whether ten people play or ten million
So there is no small version to test; you commit at full size or not at all
Whoever already carries the bill can add the next game almost free

The same force, elsewhere today

Where this chain is also running, in today's other stories.

Sega explains why it killed its billion-dollar online game

Sega's president said the investment and the operations would have had to grow enormously to match the service, so the company stopped rather than start small
Tencent calls always-online games its holy grail

the same running cost is cheap for Tencent, because Honor of Kings, League of Legends and Valorant all sit on top of it
Peak's studio starts funding other people's games

Aggro Crab can publish because the marketing and the community it already built for its own games cover the cost of one more
Don't Nod may run out of money in January

the studio is folding its French work into a single production line, because it can only afford to keep one of them staffed

Where you've seen this

Bus routes

the driver, the bus and the depot cost the same whether four people ride or forty

Newspapers

the reporting is paid for before anyone buys a copy, so the second million readers are nearly free

Vaccine factories

a plant has to be built at full size before the first dose, which is why so few firms make them

The catch

It cuts the other way too. A company already carrying the bill can add things cheaply, which is how a few very large firms end up owning a whole category and nobody new can get in.

And the whole of it

Sega stopped, Don't Nod shrank and Tencent pressed on, and the same arithmetic produced three opposite decisions. A player sees only the end of it: a game that never appears, or one that never ends.

03 Truth what's really going on

What is really going on

Sega called cancelling its billion-dollar online game a decision about risk, but what its president actually described is a size problem: the company would have had to grow enormously to run the service, and it could not. [4] Don't Nod's "transformation project" is the same kind of wording, and it means up to 90 people in France may lose their jobs. [3]

Why it works on us — Both companies reached for strategy words - risky, transformation, refocusing - where the plain words are too expensive and redundancies, and a strategy word invites you to think about the company rather than the people.

Who gains

Xiaomi — It gets the chip first. The 18 Fold is the only phone shipping with it today, and its Pad 9 Pro Max is being shown at 3.2K resolution and 120 frames a second. [1]
Arm — It sells one design to many phone makers, so years of graphics research are paid for by Xiaomi, Vivo, OnePlus and whoever licenses it next. [1][2]
Tencent — Its rivals are quitting always-online games while Tencent keeps three of the biggest running, and its Arena Breakout: Infinite is among the first titles on Arm's new chip. [11][1]
Capcom — Onimusha sold more than a million copies on day one, and the company can now fund revivals out of a library it already owns instead of new ideas. [9]
Samsung, SK Hynix and Micron — The three of them make about 90% of the world's memory, and AI buyers pay more per chip than phone and console makers can. [15]
Devolver — It owns Firefly and told the studio to start publishing, so it reaches the strategy market without hiring a strategy team of its own. [8]

Who pays

Up to 90 staff at Don't Nod in France — The board approved a restructuring on September 4 that folds the French operation into a single production line. [3]
Independent developers robbed at Gamescom — Ryan Laley, who makes Mimic, had all his laptops stolen and called it a huge blow financially and mentally. No compensation has been named. [10]
Phone and console buyers — Memory makers are selling capacity to AI customers first, and the next iPhones are expected to cost more because of it. [15]
Studios that bet on always-online games without Tencent's size — Sega wrote off Super Game after years of work, and Highguard, reportedly backed by Tencent's own TiMi group, shut down. [4][11]
Developers whose games need more than half a million dollars — The new developer-run publishers cap their cheques: Aggro Crab funds projects of up to $500,000 that can be finished within two years. [6]

What nobody knows yet

Open questions from across today’s stories — ours included.

01

Whether Don't Nod finds the money to carry on past January.

The company says there is material uncertainty beyond January 31, 2027, and that neither Aphelion nor the project it calls P14 met its funding criteria despite interest it did not name. [3]
02

How many people actually lose their jobs at Don't Nod.

Up to 90 positions in France are under consideration. The board approved the plan on September 4 and talks with staff representatives and the union have only just started. [3]
03

How long Arm spent building this.

The Verge reports five years of development on the AI graphics work; Arm's Deyan Lazarov told GamesIndustry.biz the chip itself is two and a half years old. Neither says which clock is being read. [1][2]
04

Whether the four-times figure survives a real game.

Arm's number comes from its own demonstration, Neural Dawn, built with Sumo Digital, and half the gain is invented frames, which usually add a delay between a button press and the screen. [1][2]
05

How many developers were robbed at Gamescom, and whether any are paid back.

GamesIndustry.biz asked the organisers for the number of reported incidents and about compensation, and they pointed back to their earlier statements. [10]
06

Which of its old series Capcom will actually revive.

The press release says only that it is re-activating series without a recent game. Engadget's list of candidates, including Dino Crisis and Devil May Cry, is the writer's guess, not Capcom's plan. [9]
07

Whether Sega comes back to always-online games.

Shuji Utsumi said he still believes there is a business opportunity and that Sega will keep pursuing it, without naming a project, a budget or a date. [4]
08

When memory prices stop rising.

Micron's president said the industry has to build more factory capacity, and The Verge reports the fix is years away. No company in the story gave a date. [15]

04 Hope carry this

Peak has passed 20 million players since it launched in June 2025. Its makers, Aggro Crab, are using that money to fund one or two other studios' games a year, on terms that do not require the money to be paid back in full.

Also true today

Arm put the AI networks behind its new phone graphics chip on GitHub and Hugging Face, where anyone can take them. A studio can retrain them on its own game, so the chip fills in pictures the way that game is meant to look.
Gamescom's organisers said the criticism of how they handled thefts from independent developers was justified, and that they should have said so from the first moment. They are reviewing security for indie exhibitors and holding a roundtable with the shared booths.