Why AI in Gaming has FLOPPED!

[Music] I wrote a I wrote a piece this week man it's been rare I've been able to share a piece I wrote this week I wrote a piece this week called Ai and gaming has flopped and what I argue in the piece is that we have been at the subsidization stage of AI for gaming I mean we basically have kept Nvidia alive for as long as it has been by Gamers basically just buying video cards and creating demand for 3D graphics and a lot of AI unlocked is because we've subsidized this company for decades after decades and yet we haven't been able I would argue to be on the frontier of this technology I would argue that the basic implementation of AI and gaming right now at least from a front-end consumer perspective is chat Bots chat Bots and press releases from cosmic Lounge on match three levels that we still haven't seen get delivered yet and it gets even worse when you think about like how much AI progress has been made and yet hasn't been made in gaming and then you compare that to web

like web 3 seems to have made more progress in gaming than AI has and when you think about gaming historically and when you talk to VCS specifically about web 3 one of the things that VC's will instantly tell you is that gaming is the first and best use case and helps Drive Mass customer adoption they love to tell you that fact and yet we haven't seen that be the case in AI which I think is also very troubling we used to be at the frontier a lot of these Technologies we didn't see that in web 3 though that we were the first mass adoption Cas the mass from gam uh I will leave that to the VCS in the comment sections to debate with you about I think maybe yes and no I mean when you look at like the total value of tokens how much of that is gaming tokens when you look at wallets from a mutable versus wallets from other third part I don't know I think you could make the case that gaming actually has driven a lot of web three adoption I just made this argument like a few days ago I agree that gaming makes sense as a web3 tool for web3 adoption but that didn't create Mass market adoption right it did corre accelerate adoption but it's not

creating some kind of mass Market thing unless you're talking about the population of the Philippines and in Southeast Asia then corre we could talk about Mass ad option we've done things on I would argue the supply side too in terms of physics haptic feedback we've also taken wrong directions but we've been at the Forefront right we're at the Forefront of cloud I would argue with a lot of the early streaming attempts and I'm not talking about stadia I'm talking about on live remember on live you know rest in peace but we're at the we're at the Forefront of that Innovation we think about controls you know before the iPhone had gyroscope we were we were [ __ ] with motion controls for a long time going back to the SNES subscriptions you know we're pretty early on in terms of consumer subscriptions so even though we've been involved in fail bets we've at least been on the frontier and I think when you look at like the cosmic Lounge case I think that shows where there's a lot of limits in AI at least from the supply side which is that even if you make more levels and you make more content that content is still part of an experience and experience is driven by a designer

and so we basically have moved the problems in the supply chain down the funnel so now we have a bunch of match three levels but you need to hire more designers and you need to lay them out intelligently like you need to create an experience I think AI will eventually get to that point but again it it hasn't happened you know we still are not at the Forefront of this technology and I'm surprised we haven't seen it more on the supply side or we haven't seen it more on the consumer front facing side too and I guess my message to game industry would be like let's get out there and ship fast and make sure that we're embarrassed by our first prototype but it has to be more than just like AI chat Bots if we're going to be at the Forefront of AI and I'm just I'm disappointed we haven't seen we haven't seen that be the case yet so you're saying like the what is it love girl the weird 4X thing that you chat with a an AI That's not a messy prototype I think what that is is very similar to what Eric Seaford had mentioned when he went over user acquisition AI milestones and he goes through different Milestones of how AI will be integrated and AI

basically moving up the supply chain I think that top girl game you mentioned is a part of his Milestone framework but I don't consider that a unique gaming implementation I consider that a marker you know user acquisition strategy with AI which is where the innovation has been to this point has been geni and ads yep and to your one point of web through making more progress in 26 months versus AI what data points are you look in gaming in gaming I'm just it's just a claim around we have so much Capital that's been floating around in web they seem to be making more public shipments more noise more activity more product in consumer hands than I've seen from Ai and gaming they raised in a frothy Market they've got a ton of that Capital locked in they're locked into weet three so they've got to be vocal they've got to be trying to do something and AI has been exploding during a not so frothy Market is that what's driving P that like I'm trying to get a sense of like what that 26 month really looks like I think that's totally fair Adam I I

think that if we thought AI was going to drive all this growth I would expect the graph we're looking at right now which is from Convoy Ventures I would expect there to be an acceleration in gaming VC right and right now we're looking at nominal amounts for you know 2024 it's it's at some of its lowest amounts ever when it comes to venture capital raised for gaming does this include B2B gaming or is it all just gaming consumer service they do in the Convoy report they do talk about platforms I can ask Jason over there if it is included in this specific chart I I would bet for now it is included since they mention it later in the report because like the one thing I'm thinking is what's pulling it down is obviously the status of the market the other thing is I think AI right now is mostly impacting B2B right like platforms and engines and tools I agree I completely agree so I would want to make sure that that's covered in this and then I'm because from my perspective like if we're talking about the last 26 months AI has made significantly more

developments in the last 26 months versus web 3 companies but that's from my perspective like I'd love to look at data to to suggest one way or the other but like there's that funnel right of okay so at the beginning you just have concept art right like little things you can write documents better you can do concept art then you've got marketing assets Call of Duty key art with four fingers or five fingers whatever it then you have marketing assets right that are player facing that are driving up like that is Absolut absolutely happening now and then you're getting into the actual art production and then you're getting into true AI first games and yes as you go down that funnel that percentage goes down pretty quickly right but those are the different use cases and that's how companies are going to be slowly moving between this funnel and the speed at which AI growth has been happening is pretty astronomical so maybe we're just not seeing it in these metrics but at least from where I'm

standing like anecdotally from like keeping my ear to the ground talking with other companies that are doing this like a lot of this stuff is happening under the hood of game companies where have we seen this from a consumer facing or supply side perspective that we can point to because I I get people are going into chat GDP and P in you know code to have it being corrected but where's the supply side or consumer like you know we're talking this before why am I not saying Apex Legends double characters or double Cosmetics where are the games doing that that are seeing these massive supply side increases like we were talking about this generative voices it's not doing that yet it's not at the consumer facing side I'm saying in the funnel steps before it's growing pretty quickly that you will eventually see that but you're not going to see that yet but this is my disappointment though is that we used to be at the Forefront of this stuff now we're just being dragged Along by everyone else we're at the receiving end not now we're not at the front lines advancing this like we love to pride ourselves at being where art meets science and yet this is the best we can do is like ke art and Tech spots chat Bots like another

nintend with AI in it like I would love to see game designers go ham on this like where are the game designers sitting down and be like how can I make a whole game around this and I know there are people that are taking like let's for instance say like you know being a GM and in Dungeons and Dragons but I mean like where are the real art meet science use cases of AI and games this is what's disappointed me the most is we used to be at the Forefront of this [ __ ] we're not anymore and don't be wrong AI is going to do all the things that you mentioned Adam I agree it's going to work its way through the funnel but we're not special when it comes to AI and we used to be special [Music]