The rising cost of games and how AI can transform the industry

By Ellie Glover


It’s no surprise that, along with your weekly shop, video games have increased in price significantly since the dawn of the gaming era. Relative to inflation and perhaps no comfort to consumers, video games are nowadays significantly better value. AAA games (ie. “blockbusters”) having not moved from the $60 range for over 10 years, the jump to $70 feels painful for consumers watching their spending, but games released in the ’90s would be somewhere between 50-100% more expensive by today’s standards.

It's incredible to think that the cost of making PlayStation games has increased from $100m to $200m between the most recent console generations, with development teams also doubling in size. Even for indie games, costs like marketing, tech platforms, insurance and staffing can rack up.

Measures have been taken across the board to minimise the impact of cost on publishers. While perhaps not the chief reason for most developers pulling out, cost certainly could have played into the death of the premiere gaming event E3 recently, with publishers instead starting to host their own digital events to unveil new titles.

What has been common for many years now in the mobile gaming space are the controversial microtransactions as a way to mitigate the rising costs of console games, and ensure publishers are receiving adequate returns. These in-app purchases can be used for game progression, increased user engagement, or character customisation, as well as access to limited-time events. It’s interesting the impact that has on those that can’t afford to splurge, with the game mechanics often incidentally skewed towards players who pay to upgrade. It becomes much more difficult for non-paying gamers to keep up, unless they spend excessive periods of time honing their skills. Gaming can be an escape from the real world, so inequality seeping into the gaming space can feel like the end game for some.

Not unlike what’s happening with Disney Studios, games are at risk of becoming increasingly homogeneous, with game developers determined to jump upon sequels, proven popular game dynamics (such as battle royales), and adjustments in styles to appeal to wider audiences and create more sure-fire revenues.

While the use of AI can exacerbate the homogeny, there’s no doubt that advanced technology has already helped developers speed up their processes and create more repeatability in their design.

Eugene Kitkin, of Gamestudio Lost Lore, shared a fascinating insight into how they used AI to help create the first iterations of their characters, with ChatGPT-style prompts fed in. This was a jumping-off point for illustrators to finesse characters, landscapes and items, which has proven to be 10-15x cheaper, and 10x faster (for mobile development). Quite staggering statistics, especially for smaller-scale publishers with tiny margins.

AI coding tool Copilot has already been adopted by a number of engineering leaders as more of an efficiency tool. In the same way, we use a spellchecker or autocomplete, Copilot can suggest new bits of code, or technical recommendations and even speed up testing and bug-fixing. While useful, caution is still needed when fully adopting these tools by considering any potential security and IP issues.

Intriguingly, making smarter NPCs (non-player characters) through the use of AI could transform the gamer experience, by allowing for more creative NPC actions outside of pre-determined boundaries. This, along with the possibility of being able to adapt gameplay in real-time through player analysis and machine learning, could bring about an astonishing transformation to the gamer experience. We’re likely to be a few years away from that, however.

Finally, online gaming has been challenged by an uptick in cheating, and AI can help both sides – developers can use AI to detect abnormal movements and keystrokes, while cheaters can use it to mimic realistic game interactions.

Global VC deal activity in the gaming sector doubled between 2020 and 2021 but saw a significant drop in 2022, most likely as a market correction to the previous year. Encouragingly, the market itself is now over 4x the size it was in 2019 and it doesn’t look to be going away any time soon. If publishers are able to monetise their games with things like live service models, and content subscriptions from GamePass and PS Plus, it will be interesting to see whether developers can also find commercial uses for the largely untapped opportunity in the gaming space – data.

With the current economic downturn, it may look like it’s game over for the industry, but AI may just be the hero gamers didn’t know they needed. 

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