Gaming business under threat

The gaming industry is facing several threats and AI is both a challenge and an opportunity. Especially video games business is facing great challenges from competitors but is catching up in artificial intelligence development.

AI-powered competitors are emerging, particularly in the mobile gaming space. These games can personalize experiences and adapt to player behaviour, creating a challenge for traditional developers. AI can be used to enhance game development, creating more immersive and personalized experiences. This involves:

# Automated level design and world generation

# Improved character dialogue and behaviour

# Enhanced player analytics and insights

# AI-powered customer service and support

Pony Ma, chief executive and co-founder of Tencent Holdings, remarks come at a time when Chinese game developers miHoYo and NetEase have outshone Tencent with hit titles like “Genshin Impact” and “Eggy Party”. While Tencent’s past hits such as “Honor of Kings” and “PUBG Mobile” continue to deliver strong revenue and more recent products are falling short of expectations.

Meeting player’s expectations for fresh, engaging experiences can be difficult, leading to "flop" games that don't perform as well as expected. The increasing strict regulations, particularly in China, can limit monetization strategies and content. Whereas, the industry is a prime target for cyberattacks, putting player data and infrastructure at risk.

Pony Ma, was speaking at Tencent's annual meeting, said that the company has been resting on its laurels in gaming while competitors have delivered new hits. Video games account for more than 30% of Tencent’s revenue.

Ma’s speech underscores concerns whether Tencent, the world’s biggest gaming company and the operator of China’s biggest social network WeChat, can defend its status as China’s No.1 tech company at a time marked by intensifying competition and new disruptive technologies.

Overall, the gaming industry is at a crossroads. While threats exist, AI also presents significant opportunities. Companies that embrace innovation, adapt to changing landscapes, and leverage AI effectively will be well-positioned to thrive in the future.

S Mohini Ratna, Editor, VARINDIA