It's going to reduce demand over time.

At least in video games it's probably going to be more that scope increases while headcount stays the same.

If most of your budget is labor, and the cost of the good is fixed, with the number of units sold staying around the same, there's already an equilibrium.

So companies can either (a) reduce headcount to spend a few years making a game comparable to games today when it releases, or (b) keep the same headcount and release a game that reviews well and is what the market will expect in a few years.

So for example, you don't want to reduce the number of writers or voice actors to keep a game with a handful of main NPCs and a bunch of filler NPCs when you can keep the same number of writers and actors but extend their efforts to straight up have entire cities where every NPC has branching voiced dialogue generated by extending the writing and performances of that core team.

But you still need massive amounts of human generated content to align the generative AI to the world lore, character tone, style of writing, etc.

Pipelines will change, scope will increase, but the number of people used for a AAA will largely stay the same and may even slightly grow.