TL;DR:
- The US$200 billion video games industry is embracing the power of AI to tackle escalating costs and stagnant prices.
- Companies are rapidly adopting and developing new AI tools to revolutionize game development, potentially reducing production costs and time significantly.
- AI-powered solutions are empowering smaller studios, fostering creativity, and offering a wider variety of games to players globally.
- The advent of AI is an opportunity to overhaul a business model that has faced criticism for being bloated and formulaic.
- AI is revolutionizing the creation of digital content, enabling cost-effective alternatives for character illustrations and game artwork.
- Industry veterans are starting new companies focused on AI-driven game illustrations, promising faster and cheaper options than traditional artists.
- Internally, companies are utilizing AI as a powerful in-house tool, reducing the time and cost required for tasks like rendering 3D models.
- However, rapid automation may lead to job losses in areas like quality control, debugging, customer support, and translation.
- The future of AI in the gaming industry was demonstrated by the creation of an entire game through AI generation, showing its potential and possibilities.
Main AI News:
In today’s rapidly evolving landscape, artificial intelligence (AI) is reshaping various industries, sparking both excitement and concern among executives and politicians worldwide. Among the sectors already experiencing the profound impact of AI is the US$200 billion video games industry, which is embracing this technological revolution with fervor.
From tech hubs like San Francisco to bustling metropolises like Tokyo and Hong Kong, companies that drive the digital entertainment sphere are facing soaring costs and stagnant prices that have persisted for decades. As a result, they are enthusiastically adopting and developing new AI tools to address these challenges head-on. While the rapid changes are inevitable and not without their share of pain, industry leaders and studio heads have expressed optimism, believing that embracing AI can empower smaller studios, foster creativity, and ultimately benefit gamers across the globe.
The head of a major Japanese studio envisions a future where half of the company’s programmers and designers may become redundant within the next five years due to the rise of AI-powered solutions. At Gala Sports, a Hong Kong-listed company, executives have shifted focus away from traditional research projects and now prioritize machine learning education for their department heads. Furthermore, they are offering generous bounties, reaching as high as US$7,000, for novel AI ideas. Despite their efforts, they remain anxious about keeping up with the AI trend.
Gala Technology’s 36-year-old CEO, Jia Xiaodong, sums up the industry’s feelings, stating, “Basically every week, we feel that we are going to be eliminated. The impact of AI on the game industry in the past three to four months may be as dramatic as the changes in the past thirty or forty years.”
The video game industry stands at the forefront of the AI revolution due to its inherently digital nature. Encoded in a language readable by AI and crafted by adept software engineers, it has served as a proving ground for various AI experiments. OpenAI’s ChatGPT, which took the world by storm, had its early trials in Valve Corp’s Dota 2.
This advent of AI presents a unique opportunity for the industry to revamp its business model, which, in some cases, has become bloated and formulaic, reminiscent of criticisms directed at risk-averse Hollywood. Game production costs have skyrocketed, surpassing sales figures, with recent blockbusters such as The Last of Us Part II and Horizon Forbidden West reportedly costing Sony Group over US$200 million each and demanding years of work from hundreds of staff members. AI has the potential to slice both the monetary and temporal investments in half for such projects, as stated by UBS Securities analyst Kenji Fukuyama.
Masaaki Fukuda, a vice-president at Japan’s largest AI start-up, Preferred Networks, and a former contributor to building PlayStation Network at Sony, firmly believes in the irreversible momentum of the AI trend. He anticipates a transformative shift in how digital content is created and points to their collaboration with an anime creator named Crypko. The latter offers character illustrations, which would typically cost upwards of ¥100,000 (US$720) each for outsourcing, for a flat monthly fee of ¥4,980 and a commercial license of ¥980 per image. While human artists are still involved in finalizing the AI’s work, Fukuda assures that the tool is being refined daily, and most imperfections will likely be solved within a few years.
The demand for such content has surged over the years, with mobile games that previously cost around ¥40 million to produce 15 years ago now necessitating a minimum investment of ¥500 million, largely due to graphics, according to Yuta Hanazawa, a seasoned industry veteran and former Touken Ranbu producer. Fascinated by the new technology’s potential, Hanazawa founded AI Works, a company focused on selling machine-drawn game illustrations. Similar to Crypko, AI Works requires some human intervention to finalize the product but is significantly faster and more cost-effective than hiring an artist. The company has already provided artwork for several unannounced projects, charging only half of the usual industry price. Hanazawa enthusiastically declared, “AI is the game changer I’ve been waiting for.” By relieving developers of the burden of mass-producing graphics, AI promises to rejuvenate the entire industry, allowing publishers to take more risks, creators to unleash their creativity, and users to access a broader variety of games.
AI is also transforming the way companies work internally. Gala Sports has leveraged publicly available AI services, such as image generators Stable Diffusion and Midjourney, to develop in-house toolkits for rendering realistic 3D head models. As a result, the company has significantly reduced the cost and time required for this task. They continue to invest in building further AI-powered tools to enhance coding, design, and even customer service.
However, with all this automation, there comes a downside: a corresponding loss of jobs. Industry insiders, though hesitant to speak publicly on the matter, anticipate significant job losses in areas such as quality control, debugging, customer support, or translation as AI continues to advance and take over these functions.
Conclusion:
The video games industry is at the forefront of an AI-driven transformational revolution. Embracing AI technologies offers a rare chance to revitalize the industry’s business model, reducing production costs and allowing for greater creativity. While AI brings immense opportunities for growth and efficiency, companies must also address the potential job displacement caused by automation. Overall, integrating AI in the video games sector can lead to a more dynamic and diverse market, benefiting both developers and gamers worldwide. Business leaders must proactively adapt to this disruptive force to remain competitive in this rapidly evolving landscape.
