4 min read
Artificial intelligence is increasingly driving game creation and gameplay alike. According to a recent Google Cloud survey, 87% of video game developers now use AI agents to automate tasks, build content, and enhance workflows.
Meanwhile, on the market side, the global AI in games market is projected to climb from about US $2.44 billion in 2024 to roughly US $2.88 billion in 2025, at a compound annual growth rate (CAGR) of 28.6%. Another forecast puts the broader growth at US $27.47 billion in value increase from 2025–2029, with CAGR near 42.3%.
Also notable: on Steam, one in five new games released in 2025 (≈ 7,818 titles, about 7% of the library) disclose generative AI asset usage, a nearly 700% year-over-year jump. This data signals that AI is becoming a core component of the game industry’s economics, not just a novelty.
From Tools to Worlds: The Shift in Game Creation
“Even if you’re just a pure tool user you’re going to find that the gains to utilizing those tools are very, very high,” said Gabe Newell, Valve co-founder.
Game studios are using AI for a wide variety of tasks: asset generation, level design, NPC behaviour, localisation, voiceovers, and play-testing. According to the Google survey, among developers 47% use AI for play-testing and game balancing, 44% for scripting/code generation, and 45% for localisation/translation.
A Unity report shows that 79% of developers view AI tools positively. In the words of a Google Cloud blog, “2025 will be the year AI levels up the games industry, leading to more immersive, personalized, and intelligent experiences.”
Meanwhile, generative AI assets are prevalent: visual assets dominate (around 60%), followed by audio, text/narrative, and code. The net effect: faster iteration cycles, smaller teams building bigger worlds, and new game styles emerging where content is not static but continuously generated.
Blockbusters and AAA Titles: The AI Advantage
The implications for large-budget games are stark. Former technical lead at Rockstar Games predicts that thanks to AI, production costs could be significantly lower for the next major entry in the Grand Theft Auto series, while human creative roles still dominate.
This suggests that big franchises may use AI to streamline world generation, NPC complexity, and environment design, potentially compressing what once took years into months. But as game developers warn, AI should assist creation, not replace the artistic vision.
Game Play, Not Just Creation: AI in the Player Experience
When integrated into gameplay, AI has shown the potential to transform interactive experiences. AI-powered NPCs can converse in natural language, recall player actions, and adapt behaviour accordingly. Recent demonstrations from major console platforms show prototypes of characters that remember past playthroughs.
NVIDIA’s recent release of Project G-Assist for RTX GPUs supports this trend, enabling AI mod and performance tools for players. Such developments hint at future games where each playthrough diverges significantly, meaningfully altering narrative pathways and world states.
Dollars and Decisions: Business Impacts and Market Forecasts
According to industry forecasts, the AI in video games market is projected to grow from approximately US $2.24 billion in 2024 to US $2.88 billion in 2025, a CAGR of 28.6%. Technavio projects that by 2029 the incremental growth from 2025 will reach US $27.47 billion, with a CAGR of 42.3%. Game industry reports show 2024 global revenues at about US $187.7 billion, with projected 2025 revenues approaching US $200 billion.
For studios and publishers, this means AI adoption is increasingly a strategic imperative. Developers face higher competition, pressure for faster releases, and the need to differentiate through content and player experience. Gabe Newell’s observation underscores how AI tools may democratize game development, enabling creators with fewer technical skills to build meaningful experiences.
Risk and Ethics: The Other Side of the Coin
Yet AI’s rise isn’t without challenges. Composer Nobuo Uematsu warns that the loss of human imperfections may reduce emotional resonance. Industry sources report that 10% of surveyed studios identified staff reductions in their latest GDC survey.
With one in five new games using generative AI, there’s growing concern about market oversaturation and a decline in quality. Additionally, 63% of developers express concern over ownership of AI-generated content. As industry commentator Shahriar Shahrabi asked, “How prepared am I for the ways AI might reshape the game industry in the next few years?” Most major studios are now developing formal AI policies to address these issues.
For players, this means more personalized, unpredictable, and emergent gameplay. For creators, it means rethinking timelines, talent, and technology. And for investors and publishers, AI is now a core strategic layer in the value chain.
