From Players to Makers: How Generative AI is Transforming Gamers into Creators – Choose your World

The gaming industry is the largest global entertainment category. There are more than 3 billion gamers on the planet. PWC estimate the total market size to be $227 billion in 2023 – ca. 10% of the entire entertainment and media market worldwide – and expect it to exceed $310 billion by 2027. Gaming today is economically already five times the size of the cinema industry.

Gaming is an increasingly dominant form of media. People spend more time watching gaming content (e.g. on YouTube) than they do watching Netflix. Games like Fortnite serve as community platforms for millions of users. In-game advertising, primarily in mobile games, is one of the largest revenue drivers in this >$220 billion market. Some of the most successful recent movies and TV series are based on Gaming IP, such as Super Mario Bros. and The Last of Us.

Unsurprisingly the gaming industry has always been at the forefront of digital technology advancements. The expansion of mobile gaming, the rise of online gaming platforms and cloud gaming services made games more accessible to a larger audience. AR/VR are expected to further expand the category. However, the rise of generative AI might be the most impactful technology trend in recent gaming history.

Understanding Generative AI in Gaming

Generative AI is a subset of machine learning technologies capable of generating new synthetic content, including text, images, videos, code, or 3D assets, that is on par with human-generated output. In the context of gaming, these creative capabilities can span (1) the creation of in-game assets, such as textures, landscapes, or items; (2) the design of new characters, including personalities and backstories; (3) the generation of narratives, including dynamic character dialogues or evolving storylines; (4) the production of sound and music.

On a fundamental level, generative AI will impact the games industry in two ways: On the more evolutionary side, game designers and artists can now within minutes create high-quality creative assets, that would otherwise take days or even weeks to produce, strongly increasing efficiency of games production. According to Bain, video game industry executives believe that within 5 to 10 years, AI could manage more than half of the game development process. On the more revolutionary side, integrating generative AI capabilities into games directly and in real time – for example to create more realistic NPC (non-player-character) behavior in response to player input – will unlock a plethora of novel mechanics that go beyond our current imagination.

Overall, generative AI is lowering barriers of entry to create high quality gaming content. Creative boundaries will continuously be expanded, and Gamers can expect increasingly personalized experiences.

AI startups in the space are driving both aforementioned waves, targeting both established game developers as well as gamers directly: For example, while Leonardo.AI is a generative AI platform designed to revolutionize content production for game developers, Character.AI is a consumer platform with ~ 180 million monthly visits that offers customizable AI companions – including characters from existing games or movies – with distinct personalities and tools for users to create their own experiences. Another AI platform that leans into the user generated content (UGC) side of gaming is Hidden Door, a Netflix-like platform for interactive fan experiences in the worlds of the users’ favorite books, movies and tv shows. With the technology of Hidden Door, it only takes a few hours to bring new world to life. Players can have infinite adventures, but those adventures are controllable by the original creator of the world, he is playing in. As a creator, you can define rules, behaviour and characters, but it is social, you are doing this with your friends. It’s a completely new social roleplaying experience with an ever-increasing engagement. Games no longer need to be fully pre-created, but will be created the moment players see them. And this will make games better as they will have parts the original gaming studio might not have thought of.

Shift Towards Creative Gaming

UGC is not a new phenomenon in the gaming industry. Games have evolved from simple, linear gameplay to complex, open-world environments that encourage exploration and creativity. The rise of UGC in games has marked a shift from passive consumption to active creation within gaming communities. Early examples include modding communities and custom level designs, where players used tools provided by developers to create new content for games.

Platforms like Minecraft and Roblox took UGC to new heights, offering players not just tools to create, but entire ecosystems where their creations could live, be shared, and even monetized. These games highlighted the potential for player-driven innovation and established a model where players are also creators. This not only extended the lifespan of games but also fostered a deep sense of community among players.

The advent of generative AI has the potential to revolutionize UGC in gaming by providing players with more powerful and accessible tools for creation. AI can automate complex processes, reduce the skill barrier, and inspire new forms of creativity, making it easier than ever for gamers to bring their visions to life. Most importantly, generative AI will enable UGC to go beyond pre-defined limitations of a gaming environment or platform, including creative assets, gameplay mechanics, characters, or storylines, that were not pre-defined.

In this new paradigm, games are not just entertainment but platforms for expression, innovation, and community. Generative AI is set to play a crucial role in this transition, empowering gamers to explore the limits of their creativity and redefine what it means to be a creator in the digital age.

Impact on the Gaming Industry

The decrease in production costs, coupled with reduced skill requirements for game development, will inevitably lower the barriers to entry into the gaming industry. This democratization of game creation is expected to spur a surge in the establishment of new game studios and an increase in the volume of games released.

Furthermore, because of the lower barriers of entry, it is likely that borders between gaming and other media types and creators increasingly blur. For instance, to keep readers engaged with their works, book authors may create accompanying gameplay experiences that take place in the world created in their works of fiction, without licensing their IP to a major game studio.

Generative AI is set to usher in a new era of gaming by enabling the creation of entirely new game genres that were previously unthinkable. We can anticipate the emergence of games that offer unprecedented levels of interactivity, personalization, and narrative depth. Imagine genres that blend seamless storytelling with evolving gameplay mechanics, creating experiences that adapt uniquely to each player.

Despite the exciting prospects, it is important to recognize that we are still in the nascent stages of integrating generative AI into gaming. Two significant hurdles—computing power and legal issues—pose challenges to the widespread adoption of these technologies. First, the computational demands of running generative AI models are substantial, requiring robust hardware that can process and generate complex content in real time. Second, the legal landscape surrounding the use of generative AI in media production is still unclear. Issues such as copyright infringement, especially when AI models are trained on copyrighted content, present complex challenges that need to be navigated carefully. As the industry continues to evolve, addressing these limitations will be crucial in unlocking the full potential of generative AI in gaming. As Hidden Door’s co-founder Hilary Mason put it at the DLD conference 2024: “It is the most exciting time in the gaming industry!”

Figure 1 - Media Market by Category (Source: Statista Market Insights, 2024)

Tackling our troubled global realities with technology

Discussing circularity and AI over two consecutive DLD days has shown how closely linked they are and how technology can be the enabler at scale for a more sustainable future on Earth. We need to work with the environment and not greenwash it. AI and LLMs in particular will provide us with massive productivity gains every day, everywhere, with anything we do, how we manufacture things, how we grow things, how we get around, how we stay warm and cool things and how we can predict and prevent climate and environmental disasters. All of this can contribute to substantially lower carbon emissions.

But we need to look beyond planet Earth and use the possibilities space technologies provide. “The reason we’ve got to go to space,…, is to save the Earth,” Jeff Bezos once said. This ranges from images and data, satellite internet that eventually replaces mobile towers on Earth all the way to solar power stations in space that could beam near-limitless energy back to Earth or moving heavy industries off Earth. The combination of AI and space technologies will be very powerful and effective when tackling our troubled global realities on Earth.

A very good example for that is OroraTech. Axel Roennecke, the CCO of the company, joined me on our panel “Earth, Wind and Fire – let’s talk circularity” at DLD Circular 2023. Some 20% of the world’s carbon emissions are caused by wildfires. And this large portion is expected to grow further. Climate change is drying out our forests. This causes wildfires to be so much larger, more frequent, and deadlier. The overall economic impact is hundreds of billions every year.

Traditional technologies (watch towers, water bombing aircraft) cannot break this vicious cycle. Even if governments are investing more and more money. In the US funding for fighting wildfires has grown by double-digits, but forest fires have been more severe than ever.

We need a game changer: This is what thermal intelligence from space can do. This is done by measuring the Earth’s temperature with thermal cameras in orbit. Effectively, this is like having millions of thermometers on the ground every 200 meters.

But wildfires are just one application where thermal intelligence is essential. Managing irrigation, carbon emissions, urban heat and ocean climate – all of these applications require thermal data. AI helps – inside the camera – to determine within seconds whether a hot spot it detects is actually a fire, not a chimney or some other heat source. The information on the fire size and exact location can directly be sent from space to the user’s mobile device, within minutes.

The deployment of space technologies will accelerate once companies such as SpaceX or Relativity Space will be able to launch rockets every week. Examples like OroraTech show what massive opportunity the combination of modern technologies like AI and space will provide us with to make the future on Earth more sustainable. At scale and long-lasting.