Rewriting the rules in gaming with AI

From San Francisco to Tokyo and Hong Kong, the plethora of companies that power the gaming and digital entertainment sphere are responding to decades of escalating costs and stagnant prices by feverishly adopting and developing new AI tools.

Hundreds of thousands of jobs are on the line. Yet company leaders and studio chiefs told Bloomberg News that the changes, while inevitable and painful, can empower smaller studios, boost creativity and ultimately benefit gamers around the world.

The head of one major Japanese studio is preparing for a future where half his company’s programmers and designers will be unnecessary within five years. At Hong Kong-listed Gala Sports, executives have mothballed non-AI research projects, forced department heads to study machine learning and offered bounties of as much as $7,000 for novel AI ideas.

They worry they might already be late. “Basically every week, we feel that we are going to be eliminated,” Gala Technology Holding CEO Jia Xiaodong told Bloomberg News.

“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 30 or 40 years.”

The video game industry is among the first to feel the full brunt of AI because it’s largely digital – encoded in an AI-readable language and created by software engineers well prepared to use, adapt and improve new computing tools.

AI’s impact on gaming industry

The advent of AI offers the industry a rare chance to overhaul a business model that in some cases has grown bloated and formulaic – not dissimilar to criticisms directed at risk-averse Hollywood today.

Game production costs have spiralled upward faster than sales, with recent blockbusters The Last of Us Part II and Horizon Forbidden West reportedly costing Sony Group more than $200m each and requiring years of work from hundreds of staff.

“Nothing can reverse, stop, or slow the current AI trend,” said Masaaki Fukuda, who helped build PlayStation Network while at Sony. Now a vice president at Japan’s largest AI startup, Preferred Networks, Fukuda sees a tidal wave of change in how digital content is created and his company has become involved with an anime creator named Crypko.

Character illustrations that typically cost upward of YEN100,000 ($720) each to outsource can be obtained from Crypko for a flat monthly fee of YEN4,980 and a commercial licence of YEN980 per image. It still needs human artists to fi nish the AI’s work, but the company is improving the tool daily and should be able to solve most imperfections within a few years, Fukuda said.

The scale of demand for such content has ballooned over the years, with mobile games that used to cost around YEN40m to produce 15 years ago now requiring a minimum of YEN500m, mostly because of graphics, according to former Touken Ranbu producer Yuta Hanazawa.

For the 25-year industry veteran, the new tech was compelling enough to start a new company, AI Works, to sell machine-drawn game illustrations. “AI is the game changer I’ve been waiting for,” Hanazawa said. By freeing developers from the burden of mass producing graphics, it promises to revitalise the entire industry.

“Publishers will be able to take more risks, creators can become creative again, and users as a result can choose from a much wider variety of games.”

AI replaces humans

AI is also becoming a powerful in-house tool. Gala Sports used publicly available AI services – image generators Stable Diffusion and Midjourney – to build internal toolkits for rendering realistic 3D head models, slashing the cost of a task that previously would take two weeks and as much as CNY200,000 ($28,000) when outsourced. Now it takes only half a day’s labour.

The downside to all this automation is a corresponding loss of jobs. “AI might eventually wipe out entire job categories in gaming such as quality control, debugging, customer support or translation,” said industry analyst Serkan Toto. That future was put on display last month when Tokyo-based Morikatron showed off an entire game made by AI.

Murder mystery simulator Red Ram uses Stable Diffusion and ChatGPT to generate its content based on a player’s prompts. Tsubasa Himeno, a voice actor with many game credits to her name, said the new technology will make it more difficult for young people to get a start in the business.

Jiro Ishii, known for creating the live-action novel 428: Shibuya Scramble, in a decade or two expects everyone will be able to create their own games.

Most see opportunity. Yosuke Shiokawa has operated on both ends of the spectrum, as a former producer of Sony’s hit smartphone game Fate/Grand Order as well as founder of two-yearold Fahrenheit 213.

He started dabbling with AI creation for a video trailer before using it as an aid to create in-game objects and backgrounds, adding extras his four-person team previously wouldn’t have thought to try due to limited resources. “Soon, it will be a matter of your creativity, not your budget, that determines the value of games,” Shiokawa said.

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