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Generative AI will grow from less than 5% of game development now to 50% or more in the next five to 10 years, according to a study by global consulting firm Bain & Company.
The research, titled “How will Generative AI Change the Video Game Industry,” surveyed 25 gaming executives globally and uncovered their perspectives on the impact of generative AI on the industry.
The survey found that a majority of respondents believe generative AI will enhance game quality and expedite game development. However, only 20% of executives believe that it will lead to reduced development costs.
Additionally, 60% of respondents do not anticipate generative AI to alleviate the talent shortage in the gaming industry significantly. The 60% figure is a big deal, as it could mean that generative AI won’t necessarily wipe out a ton of jobs, the executives believe.
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“Although most executives we spoke with believe generative AI may free developers from mundane work, they do not believe it will replace the creative spark necessary for game development, emphasizing the importance of human oversight,” said Andre James, global head of Bain’s Media & Entertainment practice in a statement. “Despite implementation challenges, most respondents expect generative AI will affect gaming in ways that are far greater than impacts felt by other technologies such as virtual reality (VR) and cloud gaming.”
A year ago, Bain & Company made bold predictions about the future of the video games industry. In a recent report, the global consultancy projected that the games industry would grow 50% to $300 billion in the next five years.
“While it’s an exciting time for the industry, games are growing in size and development costs are ballooning,” said Anders Christofferson, leading gaming expert and partner within Bain’s Media & Entertainment practice. “Enter generative AI, which, if harnessed properly, has incredible potential in addressing industry hurdles while at the same time provides capabilities that can benefit creators, publishers, and consumers.”
While executives acknowledged that generative AI could relieve developers from mundane tasks, they emphasized the importance of human creativity in game development. The executives highlighted that generative AI should be used as a tool alongside human oversight rather than a replacement for the creative process. The executives expressed expectations that generative AI would have a more substantial impact on gaming compared to other technologies such as virtual reality (VR) and cloud gaming.
“Video games are one of the big topics of interest for for a lot of our clients. So this year, we’ve been spending time thinking about it for the good majority of the year,” Christofferson said in an interview with GamesBeat. “There is a lot of hype with generative AI and it has become a buzzword in gaming. So we want to understand what people are really thinking about it. It isn’t some mythical idea that we need to contend with down the road. People are using it today for a lot of the video game production process. The collective feeling is that usage of it will increase over time.”
The study revealed that generative AI is likely to play a more significant role in the production stage of game development in the next decade, shifting from its current predominant use during preproduction. Areas where generative AI is expected to have a larger impact include story generation and nonplayable characters (NPCs), game assets, live game operations, and user-generated content.
“What’s most interesting is that AI is going to fundamentally change the way games are made, but probably not necessarily turn it on its heels in the ways that people are expecting,” Christofferson said. “Where we see it really having an impact is on the pre-production and production phases of of gaming. And the implications of that is, you’re going to free up time that is spent doing less value-added activities, throwing up storyboards and images and those types of things, which enables the game developers to focus more time on the creative storytelling component of game making, which is going to be really fascinating.”
He added, “I think just the quality of games, the speed to market, the storytelling, and interactive nature is just going to increase so much when this happens.”
It might be hard to see how AI could become more than half of the work in game development, but Christofferson noted that AI is already accounting for a lot of programming work at companies, and programming is a huge part of game production.
Some have pointed out the legal and regulatory challenges of the work. Generative AI could tap models that use the creative work of others without permission. If that work is challenged, then it companies that use the AI could be vulnerable to lawsuits from the proper rights holders. Christofferson said this is indeed an impediment to generative AI, but it’s not as big as the others.
“There is a question of IP ownership that’s being tackled within AI applications across all industries, not just gaming. And I think the feeling is that these are solvable issues in the near to medium term. And there’ll be legal processes that will enable video game companies to be able to use AI for sure,” he said.
According to Bain, gaming executives identified system integration as the primary barrier to implementing generative AI in gaming. Other challenges cited by the survey respondents include data training, technical capabilities, regulatory and legal oversight, and implementation costs.
Long-term challenges for gaming companies in adopting generative AI include formulating effective AI strategies, navigating the nascent and complex landscape, addressing implications of implementation, and retaining AI talent.
Bain’s survey revealed 60% of gaming executives believe generative AI will not alleviate the talent shortage, while just 20% believe it will reduce costs.
Four key steps
To maximize the benefits of generative AI, Bain suggests four key steps for gaming companies. First, taking a disciplined and deliberate approach to generative AI, including defining ambitions, establishing appropriate governance, and reducing risks.
Second, basing decisions on what will benefit the player most, rather than relying solely on generating more content, will be the best path. Third, strategically assessing opportunities for building in-house, partnering with ecosystem players, or collaborating with niche firms will be critical.
Finally, executives have to recognize that generative AI requires more than just technological transformation and necessitates the development of new work processes and enterprise architecture strategies.
“The big takeaway for us or the overarching theme is we need to be thoughtful and disciplined and have a holistic AI strategy that enables them to navigate this really complicated landscape,” Christofferson said.
Christofferson said he was excited about how AI could have a big impact on user-generated content, as users have lots of ideas but can’t really execute on them. AI could help them with the skills needed to make games based on ideas.
“I’m personally really excited about this one,” Christofferson said. “It’s going to make things easier for less technically inclined players to start creating.”
Bain & Company, a global consultancy firm, helps organizations drive transformative change. With a network spanning 65 cities in 40 countries, Bain works alongside clients to achieve remarkable results and redefine industries.
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