The Evolution of AI in Gaming: Shaping the Future of Play

6 min readDec 21, 2023

Artificial Intelligence (AI) has been a transformative force across various industries, and gaming stands as a vivid testament to its revolutionary impact. From enhancing storytelling to crafting immersive experiences and redefining game development, AI’s role in gaming continues to evolve. It’s actually nothing new — your content streaming suggestions are powered by AI, and we’ve all encountered a chatbot.

AI is a script that has been written to perform certain tasks. It’s no surprise that as the technology evolves, it will impact gaming too, with positive advances for both players and creators. The use of AI in video games goes as far back as the 1950s in a computerised game called Nim, in which two players take turns to remove objects from piles.

In one of the best-known games of all time, Pac-Man, AI governed ghost behaviour, with distinct strategies for each ghost — Blinky pursued, Pinky ambushed, Inky ambled randomly, and Clyde alternated. Space Invaders used AI to control descending alien movements, adjusting speed as their numbers dwindled. Both games showcased early AI technology to create challenging, dynamic gameplay experiences through programmed behaviours and patterns.

AI continues to significantly influence not only how we play games, but how we create them.

Enhancing Gaming Experience

AI’s integration into gaming isn’t merely a novelty; it’s a game-changer.

AI can analyse player data to personalise gaming experiences, offering tailored content, recommendations, or challenges based on individual preferences and playing styles. This is important because AI will improve storytelling and development, making the overall gaming experience more fun. In the Web 3 community, AI stands to break barriers with more immersive and futuristic experiences that will encourage longer play times. One of Cassiopeia’s clients, OMM Games, is a British/Italian startup that uses AI technology for an enhanced player experience. Its founder, technology expert Luca Vajani, is also the founder of Aries Tech, a leading software development company based in Milan. He says: “AI’s role in not just shaping player experiences but also revolutionising the game development processes. AI-driven opponents adapt to diverse gameplay styles, while dialogue systems enrich interactions, blurring the line between reality and virtual worlds, particularly in action and RPG genres.” OMM is currently developing its proprietary web 3 game, Heloriam Realms.

Transforming the Gaming Landscape

For more about AI and its impact on Gaming be sure to check out this episode on FinancialFox

The impact of AI transcends player experiences — it’s a catalyst transforming the dynamics of the whole industry. A recent panel discussion hosted on Cassiopeia’s tech podcast FinancialFox ,featuring Luca Vajani, Carles Reina and Robby Young, emphasised that generative AI accelerates game development, enabling quicker, cost-effective releases without compromising quality. With regard to revenue asset generation, the majority of games aren’t generating millions in revenue, so how do you find the right game that gives that revenue? AI is democratising game development, offering smaller studios a competitive edge in creating faster, revenue-generating games.

NPCs and Immersive Experiences

Non-playable characters (NPCs) driven by AI contribute significantly to gaming realism. Robby Young delves into this, highlighting the role of AI in enriching background narratives, catering to our innate ability to discern real from unreal.

“AI is crucial in creating believable and dynamic NPCs that interact with players. It helps in giving these characters a sense of autonomy, decision-making abilities, and unique behaviours, making the game world feel more immersive,” says Luca.

Multiple firms are leveraging AI to enhance immersion, focusing on rendering models suitable for current-gen consoles without sacrificing creativity. “AI will create even more immersive experiences –the tech is there and I believe by the second half of next year, PS5 and Xbox will have AI models integrated on them. This will open up a whole new opportunity for companies across the board, as the element of creativity will still connect and launch games where the LLMs value lies in amplifying asset and content creation quicker,” says Carles Reina, VP Revenue and Investor at Eleven Labs.

AI’s key role in content creation and the challenges that persist

The future of AI in gaming seems promising, yet challenges persist. AI adds great value when it acts as a content creation assistant. Interviewed by Stefania Barbaglio, CEO of Animoca Brand, Robby Young, shares interesting insights on how Animoca’s portfolio companies are utilising AI tools: “We have just over half a dozen companies in our portfolio (Animoca has over 400 gaming projects in its portfolio) creating AI graphics that are used in pretty much every game for better photo realism and not animation. We also use LLMs for content generation. But it’s difficult as it’s a new tool that people aren’t used to working with, so it’s challenging to add to your workflow,” adds Robby.

Luca echoes this sentiment, “We use AI to generate a very special user experience to speed production, so the main return is giving the player a new experience. We have created a system integrated in the game SDK that can recognise player behaviours in a gameplay session, and with some deep learning and classification, can have a profile that adapts content to the user’s play style. So, AI is capable of changing the game run time as it enables the game to learn about the player. This addresses issues in Web 3 gaming which centres around tokenisation and is not really about user experience. AI will be architectural, which makes it capable of decision making, so players won’t be able to predict but they will always have different storytelling in the game. This must be planned so that you don’t lose the creativity of the game. We must balance AI’s potential in creating personalised user experiences with the need to preserve game creativity.”

AI, Blockchain, and Game Development

AI’s impact on game development roles, particularly in Web 3 games, extends beyond storytelling, using visual tools and alternative approaches to storyboarding. “ Free to Play content updates in Web 2 were using generative AI to increase efficiency. From the player side, our portfolio companies have started implementing AI for NPC’s (non-playable characters) to add realism to tangential characters in the game. This added level of realism will be a curiosity for the next 12 months and after that, it will blow our minds,” adds Robby.

At OMM, Natural Language Processing (NLP) aspects like AI-powered chatbots or NLP systems are also used to enhance player interactions, providing more natural and immersive communication within games.

Procedural storytelling in gaming, which is facilitated by AI, can revolutionise player experiences by dynamically tailoring narratives based on individual actions. AI algorithms generate unique storylines, adapting to player choices, enhancing immersion, and fostering deeper engagement. This adaptive storytelling fosters a sense of agency, drawing players into a personalised narrative landscape, amplifying their emotional investment and prolonging gameplay. This is something that OMM is actively pursuing as its content seeks to create engagement and personalisation levels for players using AI.

A(I) Collaborative Future

AI in gaming continues to evolve, driving innovation in creating more engaging, immersive, and dynamic gaming experiences for players across various genres and platforms. AI’s integration will transform narratives, gameplay and development. As technology advances, the fusion of AI with blockchain and its evolving role in creating immersive experiences will redefine how games are played, crafted, and experienced. Embracing AI’s potential while addressing integration challenges will define the future landscape of gaming, where creativity and innovation converge to shape unparalleled gaming adventures.




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