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AI in Gaming Doesn't Mean What You Think It Does... Yet

Motley Fool - Sun Aug 27, 2023

Artificial intelligence (AI) is all the rage in investor circles these days, and for good reason. Earlier this week, semiconductor manufacturer Nvidia -- once a specialist in graphics chips for the videogaming industry -- credited demand for chips to power AI functions for helping it literally double its revenues in fiscal Q2 compared to the same quarter the year prior. As CEO Jensen Huang declared, "a new computing era has begun."

But what is AI doing for the gaming industry itself -- the place where Nvidia began?

Already before the pandemic, game designers had begun experimenting with technology to make gaming better, enhancing the experience of hard copy board games with smartphone apps. To find out if this has now evolved into full AI involvement in games, I undertook a quest to Gen Con 2023 in Indianapolis, the largest and longest-running gaming convention in North America.

My mission: To discover whether and to what extent game designers are using artificial intelligence in game design and game play these days.

An AI robot looks into the eyes of a robot dragon.

Image source: Getty Images.

The Dungeon Master is on -- er, I mean "in"

Dungeons & Dragons -- "D&D" to its 50 million fans worldwide -- brings together groups of players to engage in cooperative roleplay through games benignly overseen by "Dungeon Masters," or DM referees. But as time goes on, AI capabilities keep getting better and better. Examples of players using ChatGPT to design and run entire D&D scenarios already abound on the internet. So perhaps it was logical for Hasbro (NASDAQ: HAS), which owns the producer of the popular board game, to wonder if we even need human DMs to play Dungeons & Dragons anymore?

This wasn't idle speculation. In addition to the app phenomenon in gaming, earlier this year, controversy swirled around a rumored plan by Hasbro to introduce actual artificial intelligence into its hit fantasy role-playing game Dungeons & Dragons (as well as plans to charge players $30 a month to use AI DMs, and other assorted shenanigans).

But while Hasbro, for its part, was quick to deny that it is developing AI DMs...

...other companies do seem interested in the prospect.

Some of the biggest companies in the world are kicking the tires on the board game and AI pairing. In the months preceding the D&D AI DM rumor, two other tech companies with advanced artificial intelligence programs -- Alphabet subsidiary Google and Meta Platforms' Facebook -- both announced they had taught their respective AIs to play and win the cult hit board game Diplomacy -- also incidentally owned by Hasbro. While their intentions in doing so may be different than Hasbro, the fact that such major names are dipping their toes in the water demonstrates the potential that exists. But what practical effect is this having on the industry so far?

Beam me up, Scotty. There's no artificial intelligence down here.

Apparently not much -- or at least not yet.

Navigating among more than 70,000 attendees and more than 570 game publishers and vendors hawking everything from board games to card games to role-playing games across the Indiana Convention Center this month, I discovered zero companies actually utilizing AI in their games at Gen Con.

Now to be clear, Gen Con is not an entirely PC-free zone. One game I discovered, for example, a D&D-flavored board game called Freelancers by small gaming studio Plaid Hat Games, incorporated a smartphone app into its gameplay.

But as I talked with Freelancers designer Donald Shults, it quickly became apparent that there's a big difference between an app and AI. "The things we're calling AI colloquially are mostly not AI in the scientific sense, and in games we often use the term 'AI' as shorthand for 'things that the game does to control the non-playable characters,'" explained Shults.

In true AI, a game's response to a player's action would be artificially generated by the computer's large language model. But as Shults confirmed, "I haven't run across that at Gen Con yet." In the case of Freelancers, the app just presents content that was written out, voiced, and scored beforehand by humans.

That's technology ... but it's not quite AI.

AI past and future

That being said, AI isn't entirely absent from gaming, even today. In videogaming, some forms of generative AI are used, for example, to render a whole lot of trees to populate a virtual forest, rather than hiring artists to generate each tree individually.

In gameplay itself, technology can also save time by automatically looking up rules and providing answers to players. Or technology can provide voice actors and dramatic music to read descriptive text, making a game more immersive. To that extent, Freelancers leverages a sort of artificial intelligence to make gaming more fun, and less tedious.

But it's not happening immediately, nor without conflict. While investors might see the share performance of Alphabet, or Meta, or even Nvidia as evidence that AI is taking over the world, all indications from Gen Con suggest that in gaming, the revolution is not-quite-yet, and this whole artificial intelligence phenomenon might take a bit longer to play out.

Why? And when will AI enter into the gaming-sphere?

"It's funny because the app in Freelancers itself is divisive," admits Shults. "A lot of people in the hobby want to keep the experience as screen-less as possible." For this to change, game designers will need to demonstrate how AI can be used to enhance gameplay rather than replace DMs.

Over time, Shults thinks opposition to technology in games "will slowly erode and reveal a lot of places where consumers are less absolute. Some creators will be clever with how they use the technology and show inventive ways to do it." Until then, game enthusiasts will continue to enjoy these games as they have for many years prior, and investors in the space will have to wait for any real AI advancements to be adapted in a meaningful way.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Rich Smith has positions in Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, and Nvidia. The Motley Fool recommends Hasbro. The Motley Fool has a disclosure policy.

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