Elon Musk sees‘ golden age ’for gaming industry thanks to AI

AI can put the gaming industry on the verge of a new golden age. That is the opinion of Epic Games executive Tim Sweeney. Elon Musk publicly endorsed that vision this week. According to Sweeney, AI can make games possible that were previously simply too expensive to develop profitably.

That could have major consequences for publicly traded game companies such as Take-Two, Electronic Arts, and Ubisoft.

Sweeney uses his own work on the first Unreal Engine as an example. At the time, about 30 percent of his time went to difficult problems such as networking, texture mapping, and system architecture.

According to him, the remaining 70 percent consisted largely of writing, modifying, and rewriting code. AI can increasingly take over precisely this type of work.

Sweeney finds even more striking that AI can now also solve more complex technical problems. He even compares the technology to a direct version of legendary programmer John Carmack, known for Doom and Quake.

For investors, there is an interesting calculation behind this. Modern blockbusters cost increasingly more money and sometimes take nearly ten years to develop. GTA 6 is an extreme example of this.

If AI shortens development time, makes teams more productive, and automates parts of programming, dialogue, and content creation, the cost per game can decrease significantly.

For publishers, that means potentially higher margins and a faster release schedule. A company like Take-Two, for example, could become less dependent on one massive release every ten years.

EA can produce new content for existing franchises faster, while smaller publishers can make more ambitious games with the same teams.

After all, that same technology also lowers the barrier to entry. If small studios can build high-quality games for much less money thanks to AI, competition increases significantly.

Moreover, more supply means that it becomes even harder to capture the attention of players. Therefore, companies with strong franchises, distribution, and loyal player groups likely benefit the most.

AI can completely change the cost structure of the game industry. For publicly traded publishers, this presents a huge opportunity: not only building better games, but above all, much cheaper and faster.