AI and Edge Computing to Democratize Game Development 

TL;DR Breakdown

• Edge computing and AI democratize game development, allowing players to become creators and redefine creativity and player agency.
• Advanced AI NPCs enhance gameplay immersion and present valuable revenue opportunities for publishers in the gaming industry.
• The convergence of AI and Edge computing has the potential to drive mergers and acquisitions, fueling industry growth and nurturing innovation.

Video gaming is transforming remarkably, driven by innovative technologies such as artificial intelligence (AI) and edge computing. These technologies are revolutionizing the gaming experience and reshaping the game development process itself, ushering in a democratizing effect that might transform the industry landscape.

Accenture refers to edge computing – or sometimes referred to as “edge” – as an emerging computing paradigm that refers to a range of networks and devices at or near the user. Edge is about processing data closer to where it’s being generated, enabling processing at greater speeds and volumes, leading to greater action-led results in real-time.

The rise of edge computing and the empowerment of player-creators

Edge computing is one of the key technologies at the forefront of this transformation. By bringing computation closer to data sources for real-time interaction and responsiveness, edge computing holds immense promise for the gaming industry. Gamers can look forward to faster load times, near-zero latency, and enhanced gaming experience. However, perhaps the most exciting aspect is the possibility of players becoming game developers in real time. 

This shift towards player-creators can redefine the boundaries of creativity and player agency, allowing anyone to embark on game development. An excellent example of this is the game “Legend of Zelda: Tears of the Kingdom,” which leverages user-generated content (UGC) to foster creativity and engage its community. The freedom of creativity and the tangible impact of players’ actions on the game world have boosted sales, driven engagement, and created a viral wave on social media platforms.

Simultaneously, AI advancements are opening up innovative avenues in game development. Machine learning and natural language processing are breathing new life into Non-Playable Characters (NPCs), creating advanced AI NPCs that can engage in more natural conversations and make intelligent decisions. This level of immersion is highly sought after, with a recent study revealing that 99% of gamers believe that advanced AI NPCs would enhance gameplay.

While these advanced AI NPCs enhance the gaming experience, they also present a valuable revenue opportunity for publishers. The same study found that 81% of gamers will pay more for games with advanced AI NPCs, suggesting additional untapped income streams for these features. This presents an opportunity for aspiring publishers and indie developers to meet the growing demand for immersive experiences while driving additional revenue.

The transformational impact of AI and edge computing on the gaming industry

The fusion of AI and Edge computing has the potential to diversify game development and influence mergers and acquisitions (M&A) activity in the gaming industry. As non-traditional developers increasingly use these technologies to create innovative games, larger publishers may shift their growth strategies to focus on acquiring emerging titles. This could lead to a surge in M&A activity in the medium to long term, fueling industry growth while nurturing innovation.

As we venture further into this exciting future, it becomes clear that the boundaries between players and creators will blur, paving the way for an industry that is more innovative, inclusive, and dynamic than ever.

For investors seeking to access the gaming industry and capture its future potential in a diversified manner, the VanEck Video Gaming and eSports ETF (ESPO) provide an opportunity. ESPO is a passive product that tracks the MVIS Global Video Gaming and eSports Index, targeting the 25 largest and most liquid companies in the industry that generate 50% or more of their revenue from this sector.

The convergence of AI and edge computing is poised to transform the gaming industry. It empowers players to become creators, enhances gameplay through advanced AI NPCs, and presents new opportunities for revenue generation. Furthermore, it might drive M&A activity and foster industry growth. The future of game development is marked by inclusivity, innovation, and dynamic experiences, as the boundaries between players and creators continue to blur in this exciting landscape.