How AI Changes The Gaming Industry

Artificial Intelligence (AI) is already a powerful force that is changing the game industry. It refines traditional operations, customizes gameplay, upgrades game cycles, and speeds up new game development.

AI advancements won't just modify the gaming experience; they will rewrite the creation, play, and engagement rules, boosting the industry's revenue and earnings growth, according to experts.

"Artificial Intelligence has long been utilized in the game industry to power NPCs (Non-Player Characters), generate terrains and enemies procedurally, and create novel experiences for players when they replay a level," Elena Bertozzi, Professor and director of game design and development at Quinnipiac University, told International Business Times.

"New AI tools such as Chat GPT, CoPilot, and Dall_E2 will certainly transform game development as they are transforming other industries," Professor Bertozzi said.

She sees programmers as the most enthusiastic adopters and effective at eliminating some of the drudgery of programming. "Whether or not the employer is aware of it, programmers use AI to help them solve problems and write more effective and efficient code," Professor Bertozzi added.

In addition, she sees AI that generates game art, characters, and levels as an appealing proposition for studios to save money and not have to pay artists.

Tejas Dessai, a research analyst at Global X ETFs, believes AI adoption in gaming is still in the early stages, presenting a significant disruptive opportunity for gaming. Its impact could manifest in several ways, from supercharging game development to customizing gameplay on the fly for users and a generational upgrade cycle in the coming years.

"We see a newer generation of gaming platforms with a technology-first posture, such as Roblox, that are in a better position to leverage AI," he said. "One of the primary levers to maximize AI opportunity is access to data, and these companies have direct access to consumer information, which strengthens the ecosystem and allows the platform to cut deeper in serving loyal users and game developers. Roblox has been making strategic AI acquisitions for the past few years. We also see Microsoft and Sony similarly benefitting from their platform positioning."

Larry Fretz, Vice President of Industry Research and Managing Partner at Info-Tech Research Group, provides some good insights on AI's transformative changes to the gaming and hospitality industry. "It's not just about redefining traditional operations and guest experiences but also about significantly boosting margins and top-line growth. With advanced algorithms and creative potential, this technology will curate exceptionally hyper-personalized and engaging encounters."

He sees hyper-personalization and engagement as revolutionizing customer service and entertainment, elevating guest satisfaction, and driving operational efficiency and profitability in gaming.

"For their bottom lines, AI can streamline game development processes and significantly reduce development costs," added Pete Morrison, CPO at BISim, a global software company. "Specifically in serious game development, it's a lighter lift for developers to start building on an engine with AI-powered capabilities, enabling support to any imaginable vehicle or weapons systems."

Max Goff of Mission Cloud examines AI's impact on game makers' and distributors' top and bottom lines. "The ability to create more engaging and personalized experiences, streamline development processes, and optimize gambling operations will lead to increased revenue, improved profitability, and a competitive edge for those companies that embrace AI and adapt to the changing landscape," he explains.

Fretz quotes research from the Info-Tech Research Group's recent Tech Trends 2024 report, pointing to 66% of companies planning to invest in AI by the end of 2024 anticipating a positive impact on their business operations.

"This finding underscores the urgency for the gaming & hospitality industry to adopt AI technologies soon," he stated. "By investing in AI, this sector can position itself at the forefront of innovation, harnessing the power of AI to enhance customer experiences, streamline operations, and stay competitive in an increasingly digital marketplace."

Erik Severinghaus, Bloomfilter's CEO and an AI enthusiast, believes a revolution is underway beyond innovative characters and lively graphics.

"For those who think AI in gaming is just about more innovative enemies or more lifelike graphics, hold onto your hats—because we're about to go much further," he said, adding, "AI is not just tweaking the gaming experience; it's rewriting the rules of creation, play, and engagement."

That means making games feel real. "Imagine playing a game where the world reacts to you in a way that feels as real as life itself," Severinghaus continued. "AI-driven graphics and natural language processing are making this a reality. In the next few years, expect games to get so immersive that you'll forget you're sitting on your couch."

Meanwhile, he sees games that adapt to the player's style, changing difficulty on the fly or weaving narratives. "That's the future AI is crafting, and it's closer than you might think—just a few years later," he concluded.