AI in the Video Game Market
According to a new report published by Allied Market Research titled “AI in Video Games Market,” the AI in video games market will be valued at $1.1 billion in 2022 and is projected to grow at a CAGR of 26.8% from 2023 to 2032, reaching $11.4 billion by 2032.
AI in gaming refers to artificial intelligence that makes things more responsive and adaptive within a video game. A common example is when an AI controls a non-player character (NPC). NPCs are often companions, allies, or enemies to the human user, and they tweak their behavior to react appropriately to the actions of the human player. NPCs learn from interactions and modify their behavior, increasing the variety of conversations and behaviors that human gamers encounter. AI is responsible for determining the best path for the NPC to travel through the game world.
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Pathfinding algorithms calculate the most efficient route from one point to another, taking into account obstacles, terrain, and other dynamic factors. This ensures that NPCs move realistically and follow the game's level design. Additionally, the AI can adapt to changing conditions in the game. For example, if the player repeatedly uses a certain strategy, the AI learns how to counter it. This adaptability increases the game's difficulty and replayability.
Additionally, AI-powered in-game voice assistants provide players with real-time guidance, hints, and information, enhancing their experience and helping them navigate complex games more effectively. Thus, these trends are driving the growth of artificial intelligence in the video gaming market.
In addition, major market players are adopting various strategies to intensify competition and provide enhanced services to customers. For example, in May 2023, Google launched its next-generation language model, PaLM 2. The general-purpose AI model, called PaLM 2, can not only power chatbots in the ChatGPT way, but can also be used to write code, translate between languages, and analyze and react to photos.
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Combining these features, if a user asks a question in English about restaurants in Bulgaria, the system can search the web for answers in Bulgarian, find the answer, translate the answer into English, add a photo of the place, and then run a code snippet to create a database entry for that place.
In addition, in March 2023, F5 Side FX collaborated with Apple Inc. to release Houdini Apple Silicon in conjunction with the H19.5.534 production build. The Houdini Apple Silicon build is built natively for macOS arm64, allowing Mac users to take full advantage of the power of the Apple Silicon M1 and M2 chips. Such a strategy is driving the growth of AI in the video game industry.
Based on components, the hardware segment achieved the largest size of the AI in video games market size in 2022. This is attributed to the fact that gamers are increasingly seeking immersive experiences, and AI-powered hardware features are helping deliver higher levels of realism and immersion.
Based on region, Asia Pacific is expected to be the fastest growing region during the forecast period owing to increasing investments by businesses and governments towards the adoption of advanced technologies such as artificial intelligence (AI) and robotics. Moreover, rising disposable income levels are also expected to act as a driving force for AI in the video games market forecast.
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The pandemic has highlighted the importance of AI in the gaming industry and led to increased investment in AI research and development. Game studios and technology companies have poured resources into advancing AI technology for games. Moreover, as more players play games during lockdown, AI-powered features such as personalized content recommendations, dynamic difficulty adjustments, and adaptive gameplay have become essential to keep players engaged and immersed in games.
Moreover, with the growing player base, AI-powered data analytics became crucial. Game publishers and developers have been leveraging AI to analyze player behavior, preferences, and consumption habits, enabling them to make data-driven decisions about content updates, in-game monetization, and marketing strategies. Hence, COVID-19 has had a positive impact on artificial intelligence in the video games market.
Main findings of the study
1. By component, the hardware segment led the AI in video games market in terms of 2022 revenue.
2. Based on technology, the machine learning segment led the AI in video games market in terms of revenue in 2022.
3. Based on genre, the action segment led AI's share of the video games market in terms of revenue in 2022.
4. Regionally, North America is set to generate the highest revenue in 2022.
The key players profiled in the market analysis of AI in video games are Ubisoft, Google DeepMind, Inworld AI, NVIDIA Corporation, Unity Technologies, Latitude.io, Electronic Arts Inc., PrometheanAI Inc., Rockstar Games, and SideFX. These players are adopting various strategies to increase their market penetration and strengthen their position in the AI in video games industry.
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