Independent New Hampshire Journalism · Northfield, NHArtificial intelligence can build a playable world from one sentence. I found no evidence that machines will lock anyone inside it. The record points to a different risk: a world people choose and a company owns. The home video game began in Nashua, and New Hampshire’s privacy law stops one step short of the headset.
Audio edition: a synthetic voice reads the article. The charts and the fact check are on this page.
A plaque at 95 Canal Street in Nashua marks the place where the home video game was invented. The Institute of Electrical and Electronics Engineers dedicated it in 2015 to record that the Brown Box, developed at Sanders Associates between 1966 and 1968, was “the first interactive video game system to use an ordinary home television set.” The engineer was Ralph Baer, who started the work in 1966. Magnavox released the production version in 1972 as the Odyssey.
Sixty years after Baer started, artificial intelligence is rebuilding the industry his box began, and two movies have become shorthand for where the rebuilding ends. In Ready Player One, Ernest Cline’s 2011 novel and Steven Spielberg’s 2018 film, the year is 2045 and the people of a declining Earth take refuge in a virtual world called the OASIS. In The Matrix, the 1999 film by Lana and Lilly Wachowski, machines have won a war, farm human beings in pods for energy and feed a simulated world into their minds to keep control.
The popular prediction runs in a straight line. AI makes virtual reality good enough to live in, then AI takes over and locks the door. I went through the record on both halves. The first half is under construction, with real money behind it and real limits on it. For the second half I found no evidence. The prediction also reads the films backward. Nobody in Ready Player One is forced into the OASIS, and that is the story to worry about.
Related coverage: When Will AI Surpass Humans? The Builders Just Moved Up the Date covers the timelines AI companies give for their own systems. New Hampshire’s $224 Million Meta Settlement Leaves the Adult Feed Alone sets out what the state’s settlement requires and what it skips. We Are the Animal That Builds Tools is the companion essay on AI as a tool that makes tools.
A sentence can build a world
In August 2025 Google DeepMind showed a system called Genie 3. Given a line of text, the company said, it generates a world a person can move through in real time, at 24 frames per second and 720p resolution, and holds that world consistent for a few minutes. Google later opened a prototype called Project Genie to paying subscribers, first in the United States and then worldwide, with each generated world capped at 60 seconds. DeepMind’s model page lists a successor, Genie 4, as a research preview for trusted testers that supports “a few minutes of continuous interaction.”
That is the distance between the story and the lab, and it is measured in minutes. The OASIS of the film is a world people retreat into. The best system Google has described in public holds a world together about as long as a pop song. In the fiction, one inventor builds the world. In the industry, a prompt does.
The people who make games for a living have noticed. The Game Developers Conference’s 2026 State of the Game Industry survey drew more than 2,300 respondents. Thirty-six percent said they use generative AI tools on the job. Fifty-two percent said generative AI is having a negative effect on the industry, up from 30 percent a year earlier and 18 percent the year before that. Seven percent called the effect positive. Twenty-eight percent said they had been laid off in the past two years.
Game Workers Who Say Generative AI Is Hurting Their Industry
Share of respondents in three annual GDC surveys. Bars start at zero and are drawn to scale.
Granite State Report · Source: GDC, 2026 State of the Game Industry, more than 2,300 respondents.
The headset is the weak link
If the road to the OASIS runs through goggles, the goggles are behind schedule. NASA’s Ames Research Center photographed its virtual environment workstation in May 1992: a head-mounted display, a wired glove and a simulated Mars on the screen.
Thirty-four years later the bill is still coming due. Meta’s Reality Labs division, the unit that builds its virtual reality headsets and smart glasses, reported $443 million in revenue for the third quarter of 2026, down from $470 million a year earlier, and an operating loss of $4.13 billion. Over the first nine months of 2026 the division took in $1.28 billion and lost $12.78 billion, about ten dollars of operating loss for every dollar of revenue. Meta told investors it expects the 2026 loss to land between $18 billion and $19 billion and to narrow to about $15 billion the next year “as we reallocate investment toward other priority areas, primarily AI.”
Meta Reality Labs, First Nine Months of 2026
Billions of dollars. Bars start at zero and are drawn to scale.
Granite State Report · Source: Meta Platforms, third quarter 2026 results, Oct. 21, 2026. Segment revenue $1,276 million; segment loss from operations $12,775 million.
Read the last clause of that forecast again. A company losing more than $12 billion in nine months on the idea is moving investment out of that division and into AI. The software that builds worlds is sprinting. The division built to carry people inside them loses ten dollars for each one it earns.
So the likelier OASIS does not wait for a headset. It grows on the screens people already own. When the Federal Trade Commission settled with Epic Games in December 2022, the agency said Fortnite had more than 400 million users.
Where the force really is
That case is the clearest record I found of what coercion looks like inside a game, and no machine uprising is involved. The commission alleged that Epic used design tricks known as dark patterns to charge players for purchases they did not mean to make, let children run up charges without a parent’s consent and locked the accounts of customers who disputed those charges. Epic agreed to pay $520 million: a $275 million penalty under the children’s online privacy rule and $245 million in refunds.
The FTC’s account of its complaint includes an Epic designer who put the refund request link in an obscure spot, saw in testing that no player found it, asked whether to make it easier to find and was told by a superior, “it is perfect where it is at.” Epic said in a statement at the time that the practices described in the complaints were not how Fortnite operates.
New Hampshire has its own entry in this record. The state sued Meta in Merrimack County Superior Court in 2023, alleging that Facebook and Instagram were designed to hook young users. In 2026 Gov. Kelly Ayotte and Attorney General John Formella announced a settlement worth up to $224,344,141, with new protections for children on Instagram and Facebook, on terms that needed a court’s approval. The court entered the consent judgment on Sept. 23, 2026, the Department of Justice told Granite State Report in writing. Meta denied the allegations. Its third-quarter 2026 results carried a $9.89 billion charge for its agreement with 52 attorneys general over teen mental health claims. The state’s announcement does not mention virtual reality, the Quest headset or the metaverse.
Put those two cases beside the two films. In each case the door stayed open. The allegation was that the company moved the handle.
The same headset is medicine
None of this makes the technology the villain. On Nov. 16, 2021, the Food and Drug Administration granted marketing authorization to EaseVRx, a prescription virtual reality system from AppliedVR for adults with chronic lower back pain. In the trial the agency reviewed, 179 participants were assigned to the immersive program or to a two-dimensional control. Sixty-six percent of the EaseVRx group reported pain reduction greater than 30 percent, against 41 percent of the control group. By September 2024 the agency’s public list counted 69 authorized medical devices that use augmented or virtual reality.
The World Health Organization holds the other side of the ledger. Its disease classification, ICD-11, endorsed by the World Health Assembly in 2019, includes gaming disorder. The definition: impaired control over gaming, gaming given priority over other interests and daily activities, and gaming that continues despite harm, normally for at least 12 months. WHO says studies suggest the disorder affects only a small proportion of people who play.
Pew Research Center found that 85 percent of American teenagers play video games and 41 percent play at least once a day. Among the teens who play, more than half told Pew that games had helped their problem-solving, and 41 percent said games had hurt their sleep. One technology treats pain, builds skills and, for a small share of users, becomes the condition. A fair rule has to hold all of that.
What the goggles know about a Granite Stater
A headset is also a sensor strapped to a body. Researchers led from the University of California, Berkeley, studied motion recordings from 55,541 players of one virtual reality game. After training on five minutes of data per person, their model picked the right individual out of that entire pool 94.33 percent of the time from 100 seconds of head and hand movement, and 73.20 percent of the time from 10 seconds. How a person moves works like a fingerprint.
New Hampshire’s privacy law, RSA 507-H, took effect Jan. 1, 2025. It bars a covered company from processing a consumer’s sensitive data without consent, and it says agreement obtained through dark patterns does not count as consent. Sensitive data includes biometric data processed “for the purpose of uniquely identifying an individual,” along with any personal data collected from a known child. The law reaches companies that handle the personal data of at least 35,000 New Hampshire consumers in a year, or 10,000 if more than a quarter of their revenue comes from selling personal data.
Here is the gap as I read the text. The protection turns on purpose. A company that collects head and hand telemetry to animate an avatar can say the collection does not aim to identify anyone, even though the Berkeley study shows the same data can. That reading is mine, and I am not a lawyer. A House bill in the 2026 session, HB 1650, would have written a broader definition into a separate design code for services used by minors. It counted “Gait or personally identifying physical movement or patterns” as biometric data. The House Commerce and Consumer Affairs Committee voted 13-0 against the bill, and the House killed it by voice vote on March 11, 2026.
The Matrix question, answered straight
That leaves the second half of the prediction. The serious version of the fear exists, and it comes with numbers. In October 2023 the research group AI Impacts surveyed 2,778 researchers who had published at top AI venues. Asked about the long-run effect of advanced AI, 68.3 percent thought good outcomes more likely than bad. The median respondent still put a 5 percent probability on extremely bad outcomes such as human extinction. One chance in twenty, from people who publish the research, deserves a hearing in Concord and in Washington.
What that survey does not contain is the Matrix. Among the surveys, company documents and studies I read for this piece, I found no forecast of machines confining people in a simulation. The scenario comes from a screenplay. The technology cited here cannot do it either. The most advanced world model on DeepMind’s own page runs for minutes, on a screen, and a headset comes off.
The film is more careful than the prediction. In Britannica’s synopsis the machines run the simulation to keep control of people already in pods. The Library of Congress, which added The Matrix to the National Film Registry in 2012, calls it a traditional story of “man against machine.” Its best-known scene is an offer. Take the blue pill and you wake up in your own bed, back inside. Even the movie about a forced simulation turns on a choice.
That is why I rank the two films the other way around. The Matrix needs a jailer nobody has built. Ready Player One needs only a product better than the world outside it, owned by a company with every reason to keep people in. One of those is science fiction. The other has a balance sheet, a refund button the FTC says somebody hid and a settlement with this state.
What New Hampshire can do before 2045
Two steps are within reach. The Legislature can amend RSA 507-H so that movement data able to identify a person counts as biometric data whenever it is collected, whatever purpose a company states. The language already exists in the bill the House killed. And the Attorney General, who announced protections for children on Instagram and Facebook, can say in public whether those protections follow a teenager into the same company’s headset.
The first home video game was built in Nashua, and it plugged into a television set. Six decades later the worlds are bigger than anything Baer drew, and an AI can draft a new one from a sentence. The question for New Hampshire is who holds the off switch. Keep it in the player’s hand.
Dexter Dow, Granite State Report
A narrated summary of this article (1:06), read by a synthetic voice. Watch on YouTube. Photograph: Wade Sisler, NASA Ames Research Center, darkened for the title card. No video footage is used.
Your Turn
Poll: Which future worries you more?
A) People choosing to live in virtual worlds a company owns · B) AI forcing people into a simulation · C) Both · D) Neither; the fear is overblown
Verified New Hampshire residents can vote in the Your Voice poll below this article. Anyone can vote in the comments or send an answer to granitestatereport@gmail.com.
Survey, five questions: Verified New Hampshire residents can answer on the site; anyone can answer by email. 1) What town do you live in? 2) Does anyone in your household use a virtual reality headset or play online games daily, and for about how many hours a week? 3) Has your household been charged for an in-game purchase nobody meant to make? If yes, on which platform and in what year? 4) Did you ask for a refund, and what happened? 5) May Granite State Report follow up with you by email?
Petition: Count the body as biometric. To the New Hampshire House and Senate: amend RSA 507-H:1 so that movement data able to identify a person is biometric data whenever it is collected, whatever purpose a company states. Verified New Hampshire residents can sign it on the site.
You tell me: Would you put a limit on a headset in your house, and who should set it: the parent, the company or the state? If a game has ever made it hard for you to quit or to get your money back, what did the screen look like?
Survey answers are collected for reporting only. Fields: town, platform, hours per week, unwanted charge (yes or no, year), refund outcome, comments, and an email address only if you agree to follow-up. Consent line: “Granite State Report may contact me about my answers. No name published without permission.” Answers are kept 24 months, then deleted or stripped of identifying details.
No person or company named in this article was asked to comment for it. It rests on public records and on the companies’ own published statements, including Epic’s and Meta’s. Any of them may write to granitestatereport@gmail.com; a response will be added here with its date.
Fact check
| # | Claim | Status | Source |
|---|---|---|---|
| 1 | The Brown Box was developed at Sanders Associates, Nashua, between 1966 and 1968; quoted description; Baer began work in 1966; plaque at 95 Canal St.; Magnavox Odyssey released 1972. | VERIFIED | IEEE Milestone 158, “Interactive Video Games, 1966,” dedicated Sept. 21, 2015 (Engineering and Technology History Wiki). |
| 2 | Ready Player One: novel by Ernest Cline, 2011; film by Steven Spielberg, 2018; set in 2045; people of a declining Earth find refuge in the OASIS. | ATTRIBUTED | Encyclopaedia Britannica, entries on Steven Spielberg and Ernest Cline. Plot description is Britannica’s. |
| 3 | The Matrix: 1999 film by Lana and Lilly Wachowski; machines farm humans in pods for energy and project a simulation to keep control; the blue pill returns Neo to his bed. | ATTRIBUTED | Encyclopaedia Britannica, “The Matrix.” Plot description is Britannica’s. |
| 4 | The Matrix was selected for the National Film Registry in 2012; described as a story of “man against machine.” | VERIFIED | Library of Congress, National Film Registry, brief descriptions of registry titles. |
| 5 | Genie 3: shown August 2025; generates navigable worlds from text at 24 frames per second, 720p, consistent for a few minutes. | ATTRIBUTED | Google DeepMind, “Genie 3: A new frontier for world models”; Google’s August 2025 AI recap. Capabilities are the company’s claims. |
| 6 | Project Genie opened to Google AI Ultra subscribers in the U.S., then worldwide; generations limited to 60 seconds. Genie 4 listed as a research preview for trusted testers supporting “a few minutes of continuous interaction.” | ATTRIBUTED | Google, Project Genie announcements; Google DeepMind, Genie model page, read Nov. 13, 2026. |
| 7 | GDC 2026 survey: more than 2,300 respondents; 36 percent use generative AI at work; 52 percent say its effect is negative (30 and 18 percent in the two prior reports); 7 percent positive; 28 percent laid off in the past two years. | VERIFIED | GDC, “GDC 2026 State of the Game Industry Reveals Impact of Layoffs, Generative AI, and More.” |
| 8 | NASA Ames photographed its Virtual Environment Telepresence workstation on May 29, 1992; 34 years before 2026. | VERIFIED | NASA Image and Video Library, ARC-1992-AC92-0326-23; Granite State Report arithmetic. |
| 9 | Reality Labs, third quarter 2026: revenue $443 million (vs. $470 million), operating loss $4,129 million. Nine months: revenue $1,276 million, loss $12,775 million, a ratio of 10.0 to 1. Outlook: 2026 loss of $18 billion to $19 billion; about $15 billion the next year; quoted clause. | VERIFIED | Meta Platforms, “Meta Reports Third Quarter 2026 Results,” Oct. 21, 2026; Granite State Report arithmetic. |
| 10 | Reality Labs builds Meta’s virtual reality headsets and smart glasses. | ATTRIBUTED | CNBC, Meta third-quarter 2026 earnings coverage, Oct. 21, 2026. |
| 11 | FTC and Epic Games, December 2022: $520 million total, a $275 million children’s privacy penalty and $245 million in refunds; allegations of dark patterns, unauthorized charges by children and locked accounts; Fortnite had more than 400 million users; the refund-link account and quoted reply. | ATTRIBUTED | Federal Trade Commission press release, Dec. 19, 2022, and FTC business blog of the same date. These are the agency’s allegations; the case settled. |
| 12 | Epic said the practices in the complaints were not how Fortnite operates. | ATTRIBUTED | Epic Games statement of December 2022 as reported by The National Desk (KATV), March 2023. |
| 13 | New Hampshire sued Meta in Merrimack County Superior Court in 2023 (No. 217-2023-CV-00594); settlement of up to $224,344,141 announced in 2026 by Gov. Ayotte and Attorney General Formella; protections cover Instagram and Facebook; terms needed court approval, and the court entered the consent judgment on Sept. 23, 2026; the announcement does not mention virtual reality, Quest or the metaverse; Meta denied the allegations. | ATTRIBUTED | State of New Hampshire settlement announcement, as published by the City of Rochester; Granite State Report, Nov. 11, 2026, citing the proposed consent judgment. Entry date: written reply from Michael Garrity, N.H. Department of Justice, to Granite State Report, Nov. 13, 2026, which does not name the court. |
| 14 | Meta recorded a $9.89 billion third-quarter 2026 charge related to its agreement with 52 attorneys general. | VERIFIED | Meta Platforms, third quarter 2026 results. |
| 15 | FDA granted De Novo marketing authorization for EaseVRx (AppliedVR) on Nov. 16, 2021; 179-participant trial; 66 percent vs. 41 percent reported pain reduction greater than 30 percent; 69 AR/VR medical devices on the FDA list as of its Sept. 6, 2024 update. | VERIFIED | FDA De Novo record DEN210014; FDA news release, Nov. 16, 2021 (Spanish-language edition read); FDA, Augmented Reality and Virtual Reality in Medical Devices. |
| 16 | Gaming disorder is in ICD-11, endorsed by the World Health Assembly in 2019; definition and 12-month guide; affects a small proportion of people who play. | VERIFIED | World Health Organization, “Addictive behaviours: Gaming disorder” and “Addictive behaviour.” |
| 17 | 85 percent of U.S. teens play video games; 41 percent play daily; among players, over half say games helped problem-solving and 41 percent say games hurt their sleep. | VERIFIED | Pew Research Center, “Teens and Video Games Today,” May 9, 2024. |
| 18 | 55,541 virtual reality users identified at 94.33 percent accuracy from 100 seconds of head and hand motion and 73.20 percent from 10 seconds, after five minutes of training data per person. | VERIFIED | Nair et al., “Unique Identification of 50,000+ Virtual Reality Users from Head & Hand Motion Data,” USENIX Security 2023. |
| 19 | RSA 507-H took effect Jan. 1, 2025; definitions of biometric data, sensitive data and consent; 35,000 and 10,000 consumer thresholds; no processing of sensitive data without consent. | VERIFIED | RSA 507-H:1, 507-H:2 and 507-H:6, I(d), at gc.nh.gov. |
| 20 | The purpose-based wording of RSA 507-H leaves avatar motion telemetry in a gap. | ATTRIBUTED | Granite State Report reading of RSA 507-H:1. No court or Attorney General interpretation is cited. |
| 21 | HB 1650 (2026), an age-appropriate design code, defined biometric data to include gait or personally identifying physical movement; committee voted 13-0 Inexpedient to Legislate; House adopted that motion by voice vote March 11, 2026. | VERIFIED | HB 1650 as introduced, N.H. General Court; LegiScan bill history citing House Journal 7, p. 13. |
| 22 | AI Impacts survey, October 2023: 2,778 researchers; 68.3 percent thought good outcomes more likely than bad; median 5 percent probability of extremely bad outcomes such as human extinction. | VERIFIED | Grace et al., “Thousands of AI Authors on the Future of AI,” arXiv 2401.02843; Journal of Artificial Intelligence Research, 2025. |
| 23 | No forecast of machines confining people in a simulation was found. | ATTRIBUTED | Granite State Report review of the sources listed here. An absence of located evidence, limited to those sources. |
If a game or a headset has charged your household, tracked your child or made it hard to leave, the screenshots and receipts are the record. Confidentiality respected where possible. granitestatereport@gmail.com · (603) 931-9264.
Editor’s note. Film plots are described from Encyclopaedia Britannica’s entries and the Library of Congress registry description. Company capabilities and forecasts are the companies’ own statements. Allegations in the FTC and New Hampshire cases are identified as allegations; both matters ended in settlements. The reading of RSA 507-H is the author’s and is not legal advice. Ratios and year counts are Granite State Report arithmetic from the cited figures. Updated Nov. 13, 2026, to add the date the court entered the Meta consent judgment, from the Department of Justice’s written reply.
Corrections: Granite State Report corrects verified errors promptly and appends a dated note identifying what changed and when. Correction notes are never removed.
