In a report published on Bloomberg, as per Morgan Stanley, game platforms like Microsoft’s Xbox and Sony’s PlayStation are poised to reap substantial benefits from adopting artificial intelligence (AI) in the gaming industry.
The analysts at Morgan Stanley, led by Matthew Cost, believe that platform companies are relatively insulated from the risks of AI disruption and may emerge as the primary distributors of AI tools. Companies like Unity Software, Roblox, and Tencent are expected to thrive in this AI and data science landscape.
AI is introducing an opportunity for the gaming industry to revamp its business model, which has sometimes grown unwieldy and predictable. Rising costs and stagnant product prices have prompted game companies to embrace AI tools, which are set to transform how games are created.
Microsoft’s Xbox and Sony’s PlayStation are among “the most clear-cut beneficiaries of AI adoption in the game industry,” according to Morgan Stanley https://t.co/zC98b8ieTU
— Bloomberg (@business) October 23, 2023
How Will AI Impact Major Game Development Studios?
The impact on game publishers is likely to be mixed. While AI will reduce the cost of producing and operating top-tier “AAA” games by up to 15%, it will also intensify competition in the market. Morgan Stanley identifies a “clear AI bull case” for larger AAA game publishers such as Ubisoft Entertainment, Nexon, and Take-Two Interactive Software.
Take-Two Interactive, for instance, could potentially see a 10% boost in earnings due to lower costs. In contrast, smaller publishers like Playtika Holding are expected to benefit less from AI and may face reduced barriers to entry, potentially impacting their position in the industry.
AI is poised to reshape the $200 billion gaming industry, with game platforms and large publishers emerging as clear beneficiaries. The technology offers cost-saving potential but also brings heightened competition, ultimately changing how the industry develops and distributes games.
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