Steam Next Fest Opens as AI Clones Scare Indie Developers Off Demos

Steam Next Fest opened October 19 with a record lineup: 8,011 demos listed on the event's press preview page, roughly twice the number shown in June and far above the thousand or so that appeared in the same festival four years earlier. For a week, anyone can try thousands of unreleased games for free, and unknown studios get their best shot at being discovered. But days before the festival began, an indie studio cancelled its public demo, saying AI-assisted copycats could rebuild the game and release it before the original. For some developers, the fear of AI clones has made the internet's biggest demo showcase feel like a risk not worth taking.

A demo cancelled over AI copycats

Alliance Arts Inc. and WHO YOU made the call for Drunken Goddess Reflux, a drinking survival game built around a twisted game of Russian roulette against a demon in an underworld bar. The demo had been scheduled for the festival's opening day. Instead, the companies announced on October 16 that the public release was off, and that they would run closed online play sessions for a limited number of participants, Dexerto reported.

In a statement, Alliance Arts said it worried the demo's content could be used to "quickly imitate or replicate the game's presentation and gameplay with AI or other tools," and that such copies could be released before its own launch. The studio had planned to release the demo publicly with restrictions on posting and streaming gameplay footage, but concluded its current team could not properly manage those rules. Alliance Arts, which also made the viral anime hit Needy Streamer Overload, is handling applications for the closed sessions through the game's official Discord server. The full game is still due on Steam on December 8, according to Gematsu.

The worry is not abstract. One developer who shared a game prototype online saw it copied within hours, PC Gamer noted, and McPixel creator Sos Sosowski has spent recent weeks posting examples on Bluesky of indie games being replicated by AI-assisted cloners and released on Steam, according to Attack of the Fanboy. Copycat games are an old problem on PC storefronts. The tools for making them have never been faster or cheaper.

Copied code, not just copied ideas

The cloning has already moved past imitation of ideas into outright copying of code. On October 17, NoGlyph, the studio behind the viral digging game Needle In A Haystack, accused another Steam release, A Game About Needle In A Haystack by Little Field Studios, of containing its code. NoGlyph said it found 13 of its classes with identical names inside the other game's files, that more than half the functions in that section matched exactly, and that some of its own error messages remained word for word, including one pointing to a shader that does not exist in the other project, Kotaku reported.

The studio's lead developer, Jahvin, went further on the team's Discord, saying the rival game contains 39 same-named methods that are "byte-for-byte identical." Kotaku described that as a classic sign of Claude-assisted decompilation: using AI to make a closed-source game's source code readable, then lifting it. NoGlyph has filed a copyright notice with Valve.

An irony runs through the dispute. NoGlyph's own game is itself a fast follower of Studio Bitdot's Needle In A Haystack Simulator, which blew up in August after creator Nas posted a clip of a game where the player digs through five million pieces of hay for a single needle. Some Steam users treated NoGlyph's complaint as karma. But the distinction the studio draws is the one that matters legally: ideas are not protected, code is. What Valve does with the notice will set a marker for how much of this the platform polices, and how much it leaves to developers to catch themselves.

A record festival with a signal problem

That demo count covers matches on Next Fest's press preview landing page, not a curated lineup, as The Daily Game News noted, and Steam's discovery algorithm was already going to keep most of those demos out of public view. The practical effect for players is a demo queue with no reliable way to separate a considered prototype from a weekend's output, The Daily Game News reported.

The speed of the copying is the point. On October 10, the creator of Escape the Walls, an incremental punching game that itself uses AI to speed up development, posted in-progress footage on X. A reply predicted the creator had hours before someone rebuilt it on Roblox for many times the revenue. Nine days later there were at least seven Roblox clones of the game, and a competing studio tweeted its own version at the original creator with the message that there was "nothing wrong with friendly competition." A demo used to come with a built-in head start: the original team had the code, the art, and the audience. When a clone can be assembled in hours, that head start shrinks to however long it takes a competitor to watch a trailer.

What happens to the demo

The deeper risk is the one Alliance Arts has already acted on. If more studios conclude that a public demo hands their design to competitors, demos become closed sessions behind participation agreements, and Next Fest loses the thing that made it useful: a low-cost way for unknown developers to reach players directly. The festival's growth and its value are pulling in opposite directions.

For players, the practical move this week is to follow developers whose previous work they trust rather than browsing the front page, and to treat a polished trailer as evidence of nothing in particular. More stories from the world of games are in the Tech & Games section.