Nick Frasse, Associate Product Manager
The world of video games is undergoing an unprecedented transformation. what about the catalyst? Cutting-edge technologies such as artificial intelligence (AI) and edge computing. These technologies are revolutionizing not only the gaming experience but also the way games are developed, with a democratizing effect that is reshaping the landscape of the industry.
Redefining handheld power
Edge computing brings computation closer to the data source for real-time interaction and responsiveness, bringing significant benefits to the gaming industry. Gamers can enjoy faster load times, near-zero latency, and an overall improved gaming experience. But perhaps even more exciting is the possibility for players to create their own games in real time. This potential shift to player-cum-creator could redefine the boundaries of creativity and player agency, suggesting a future where everyone can be a game developer. One example is The Legend of Zelda: Tears of the Kingdom, which leverages user-generated content (UGC) to encourage creativity and engage the community. This creative freedom, combined with the tangible impact of player actions on the game world, has increased sales, fostered engagement, and created a viral wave on social media.
Free men are paid men (IRL)
At the same time, advances in AI are opening innovative avenues in game development. Machine learning and natural language processing breathe new life into non-playable characters (NPCs), creating advanced AI NPCs that can speak more naturally and make intelligent decisions. This level of immersion is clearly in high demand, with a recent survey revealing he 99% of gamers believe advanced AI NPCs improve gameplay.
These advanced AI NPCs can enrich gameplay, but also provide valuable revenue opportunities for publishers. The same survey found that 81% of gamers would be willing to pay more for games with advanced AI NPCs, suggesting these features have additional untapped revenue streams. It has been. For aspiring publishers and indie developers, this is an opportunity to meet the growing demand for immersive experiences while driving additional revenue.
Source: Reddit.
PAC-MAN’S GROWTH STRATEGY
AI and edge computing have the potential to diversify game development, but they can also have an impact. M&A activity in the game industry. As more non-traditional developers use these technologies to create innovative games, major publishers may begin to focus their growth strategies on acquiring emerging new titles. This could lead to a surge in M&A activity in the medium to long term, spurring industry growth as well as spurring innovation.
As we move forward into this exciting future, it’s clear that the lines between players and creators will blur, paving the way for a more innovative, inclusive and dynamic industry than ever before.
One way for investors to access the space in multiple ways and capture the future potential of the industry is to: VanEck Video Game and Esports ETF (ESPO). ESPO is a passive product that tracks the MVIS Global Video Game and eSports Index. The index covers 25 of the industry’s largest and most liquid companies that derive more than 50% of their revenue from their industry.
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originally published June 9, 2023.
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Disclosure
sauce: Forbes, “How the Gaming Industry Can Leverage Advances in AI to Revolutionize NPCs”.
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