Video game studios are compelling managers to learn machine learning and incentivizing employees with $7,000 rewards for A.I. ideas due to their fear of A.I.

Video game studios are compelling managers to learn machine learning and incentivizing employees with $7,000 rewards for A.I. ideas due to their fear of A.I.

The Impact of AI on the Gaming Industry: Empowering Creativity and Revolutionizing Business Models

AI in Gaming

The digital entertainment sphere is undergoing a seismic shift as companies around the world embrace and develop new AI tools. From San Francisco to Tokyo and Hong Kong, industry leaders are recognizing that adopting AI technologies is not just essential for survival, but also offers numerous benefits for the gaming community. While these changes may be inevitable and even painful for some, they hold the potential to empower smaller studios, boost creativity, and fundamentally transform the gaming landscape.

A Glimpse into the Future

One major Japanese studio head is bracing for a future where half of their programmers and designers may no longer be needed within the next five years. At Gala Sports, a Hong Kong-listed company, executives have shifted their focus away from non-AI research projects, incentivized their teams to study machine learning, and offered enticing bounties for novel AI ideas. Gala’s CEO, Jia Xiaodong, expresses a sense of urgency, saying, “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 Gaming Industry at the Forefront of AI Integration

The gaming industry is uniquely positioned to embrace the potential of AI due to its largely digital nature. Games are encoded in an AI-readable language and created by software engineers who are well-prepared to utilize, adapt, and improve new computing tools. OpenAI’s breakthrough with ChatGPT in November is a testament to this, as it used Valve Corp.’s Dota 2 as a proving ground for its bots.

The advent of AI offers the gaming industry a rare opportunity to reevaluate and overhaul an existing business model that is often criticized for its bloated and formulaic approach, similar to the risk-averse Hollywood production machine. The production costs of blockbuster games, such as The Last of Us Part II and Horizon Forbidden West, have skyrocketed to over $200 million each, requiring years of work from large teams. However, UBS Securities analyst Kenji Fukuyama suggests that AI could potentially cut the investment of money and time for such projects in half.

The Promise of AI: Reinvigorating Creativity and Lowering Costs

Masaaki Fukuda, a seasoned industry professional, staunchly believes that AI’s impact on the game industry is unstoppable. Fukuda, now a vice president at Preferred Networks Inc., a leading AI startup in Japan, envisions a tidal wave of change in how digital content is created. His company has collaborated with Crypko, an anime creator, to leverage AI tools that significantly reduce the cost of character illustrations. What once cost over ¥100,000 ($720) per image can now be obtained through Crypko for a flat monthly fee of ¥4,980 and a commercial license of ¥980. Although human artists are still required to add finishing touches, Fukuda predicts that most imperfections can be solved within a few years.

The demand for digital content in the gaming industry has grown exponentially in recent years. For example, the cost of producing mobile games has increased from approximately ¥40 million to a minimum of ¥500 million, primarily due to graphics. Yuta Hanazawa, a former Touken Ranbu producer, established AI Works Inc. to offer machine-drawn game illustrations at a much faster and more affordable rate than hiring traditional artists. Hanazawa affirms, “AI is the game changer I’ve been waiting for.” By relieving developers from the burdens of repetitive graphic production, AI has the potential to breathe new life into the industry, allowing publishers to take more risks, creators to unleash their creativity, and users to choose from a wider variety of games.

AI as a Powerful In-House Tool

AI is not only transforming game development, but it also offers invaluable benefits as an in-house tool. Gala Sports, for example, utilized publicly available AI services to build internal toolkits, enabling them to render realistic 3D head models at a fraction of the previous time and cost. What originally took two weeks and 200,000 yuan ($28,000) when outsourced, now only requires half a day of labor. The company is actively working on expanding their AI capabilities to assist with coding, design, and customer service.

The Flip Side: Job Loss and Potential Challenges

However, the automation brought about by AI also comes with significant consequences for employment. Executives within the industry anticipate that certain job categories in gaming, such as quality control, debugging, customer support, or translation, may eventually be wiped out by AI. This bleak outlook was recently exemplified by Tokyo-based Morikatron Inc., who showcased an entire game developed solely by AI. The murder mystery simulator, Red Ram, generates content based on player prompts using Stable Diffusion and ChatGPT. While this demonstrates the immense potential of AI, it also raises concerns about the impact on job opportunities, as voiced by industry professionals like voice actor Tsubasa Himeno.

A Plethora of Opportunities and a Shift in Value Determinants

Despite concerns about job losses, industry insiders overwhelmingly see AI as an opportunity rather than a threat. Yosuke Shiokawa, a former producer of Sony’s hit smartphone game Fate/Grand Order, and founder of Fahrenheit 213 Inc., has embraced AI as a means to enhance creativity. Shiokawa used AI to create video trailers, develop in-game objects and backgrounds, and add extras that were previously constrained by limited resources. He believes that in the near future, a game’s value will be determined more by creativity than budget limitations.

Embracing the Future

The gaming industry is on the brink of an AI revolution that promises to empower smaller studios, increase creativity, and revolutionize business models. As companies increasingly adopt AI technologies, they will be able to streamline their operations, reduce costs, and offer a wider variety of games to cater to different player preferences. While challenges may lie ahead, the potential benefits for gamers around the world are immense. The AI-driven future of gaming is already here, and those who embrace it are poised to shape the industry’s landscape for years to come.