AI could screw gaming economy, The Voice Coach Battle, Axies: Web3 Gamer

AI could flood the market: ArenaX Labs co-founder

ArenaX Labs co-founder Wei Xie — the company behind AI battle training game AI Arena — believes artificial intelligence could help smaller game companies compete against the industry giants. But he warns it may also disrupt the entire gaming economy.

“AI creates a slightly more level playing field for smaller companies or groups, giving them the ability to compete against the very large enterprises with extensive resources. This could lead to a renaissance period for indie gaming,” Xie tells Web3 Gamer.

“In the future, we may see smaller teams able to develop impressive games at a lower cost and faster velocity. This trend is clear and shows no signs of slowing down,” he adds.

He argues that AI “amplifies the capacity” that gaming companies have to develop games, allowing for the “frictionless creation” of new characters and environments.

However, friction usually acts like a scale in the gaming economy and balances out the competition in the industry. When resources are scarce — such as top expensive developers — and there is fair competition to create the best games, it allows for market equilibrium.

“The removal of friction, which typically acts as an arbiter mediating competitive forces and ensuring balance within the economy, may create significant headwinds when it comes to economic design,” he says.

If AI makes everything too easy, there’s a risk of flooding the market with too many games and creating an oversupply of developers who will no longer be needed.

“In Web3 gaming, where games are financialized, this poses a challenge as it can massively distort the supply and demand curve,” he adds.

Another issue is in companies using off-the-shelf AI solutions to build games without understanding what’s going on under the hood. 

“This may lead to interesting technical challenges that they cannot overcome, or hidden issues with using AI in the context of gaming that only…

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