@GDC AI Native Games: Revolution or Evolution?
How AI is radically transforming game dev with Aaron Farr, CTO at Jam & Tea and Liam Deana Principal Analyst, Games at Omdia
The gaming industry is at a critical inflection point as AI reshapes development processes and player experiences. During GDC, I spoke with J. Aaron Farr, CTO at Jam & Tea Studios (one of the very few companies building an “AI Native” game), and Liam Deane, Principal Analyst, Games at Omdia.
We discussed how studios like Jam and Tea develop games with emergent AI gameplay while compressing development cycles from years to months. We also discussed how AI will have a profound and transformative impact on the games industry.
For studio leaders, the question isn't whether AI will impact their business but how quickly they can adapt their organizations to maintain a competitive advantage in this brave new world!
Check out our conversation below! 👇👇👇
🎧 Listen on Spotify, Apple Podcasts, or Anchor
Speakers:
Liam Deane. Principal Analyst at Omdia.
J. Aaron Farr. CTO at Jam & Tea Studios.
Joseph Kim. CEO at Lila Games.
Impact on the Game Industry
Evolution, Not Extinction: AI won't replace current game types but will create new categories of games and development processes. As Aaron Farr put it, “the kinds of games we have now won't disappear - we'll simply add new types of games and development processes, resulting in a broader ecosystem.”
"AI-Native" Games: An AI-native game fundamentally leverages AI to enable new player experiences that wouldn't be possible otherwise. Aaron's company is building Retail Mage, which he considers a true AI-native game.
Market Expansion Potential: Similar to how online multiplayer games created an entirely new segment without eliminating single-player games, AI native games could attract players who aren't currently engaged with existing game formats, potentially expanding the overall market.
New Player Experiences
Improvisational Play: AI enables what Aaron calls "improvisational play," in which the game simulation responds to players in previously impossible ways.
"Rulings, Not Rules": Traditional games have hard-coded rules, but AI allows for a more flexible system of "rulings". The AI can evaluate the game state contextually and make judgments that weren't pre-programmed.
Emergent Gameplay: In Retail Mage, players can attempt creative solutions that weren't explicitly programmed. Aaron shared an example where a player, unable to remove a painting from a wall due to low strength stats, tore paper from a book, wrote an IOU note, and gave it to an NPC customer who accepted it - all emergent gameplay the developers never explicitly coded.
Development Implications
Accelerated Development Cycles: Aaron's team conceived and built Retail Mage, a multiplayer Unreal 5 game with an AI backend, in just five months with a team of eight people.
Cost Considerations: When Aaron's team first began prototyping, the API costs for a four-player session would equal "the cost of a ticket to Disneyland." Over the past year, their work has reduced costs from "hundreds of dollars to dimes," making commercial viability possible.
Role Compression: Joseph Kim predicts that AI will compress traditional roles, potentially combining positions like engineer and product manager into hybrid roles like "product engineer," leading to new organizational structures.
Competitive Advantages
Product Velocity: Companies that can maintain high product velocity - quickly taking player feedback and adjusting accordingly - will have a significant advantage. This requires dynamic teams that understand how to optimize development factors and apply AI effectively.
AI Native Studios: Some studios are being built from the ground up with AI infrastructure, giving them more speed and capabilities than those trying to adapt legacy systems.
“Large to Small Vector Development”: AI is compressing what previously required "large vectors" (time, resources, budget) into "small vectors," similar to how Roblox opened game creation to more creators by encapsulating complex functionality.
Current Limitations
Compute and Data Constraints: Currently, AI's primary limitations in games are computational requirements and data needs. Even with substantial improvements, developers would still find ways to utilize all available compute power.
Integration Challenges: Aaron highlighted that current AI tools are often too low-level. The real challenge is integrating AI capabilities with existing game systems, such as quest systems and in-game economies.
Industry Controversy: AI remains a controversial topic in the games industry, potentially more so than in other sectors. Many companies are experimenting with AI but aren't public about their efforts to avoid potential blowback.
Conclusion
Far from being just hype, AI is already transforming game development and enabling new player experiences. The most forward-thinking studios are rethinking their organizational structures and development processes around AI capabilities. While we won't see traditional games disappear, the emergence of AI-native games represents a significant evolution that may expand the market by attracting new players who aren't engaged by current offerings.
For studios looking to remain competitive, the key is finding the right balance between leveraging AI for productivity gains and exploring how it can enable fundamentally new game experiences that weren't previously possible.