As the disastrous 2020 and 2021 financially worsened due to layoffs and studio shut down, the video game industry is planning for the 2025 bounce back. Modern day market titans are now looking for fresh opportunities, and one such opportunity that has been tweaked significantly is the technology which could redefine the gaming structure. That probably bothered people who believed that the sector could recover and begin to grow again with reference to new trends such as AI and generative technologies.
Video Game Industry Looks to Bounce Back with AI Innovation in 2025
AI has been around gaming to make NPCs more realistic, however, generative AI which is AI capable of creating content with a simple language input has not been implemented deeply in gaming industry. If we talk to Simon Carless, the founder of GameDiscoverCo, he noted that generative AI is in its infancy and currently leveraged only slightly. But there is more attention from the large players in the field which means that the technology can have a larger application in the future.
A perfect example of the company that has gone to great lengths to incorporate AI is Electronic Arts (EA). In September EA introduced new tools that enable developers to create prototypes of levels of games with help of artificial intelligence. This move indicates that the industry since then has placed its bet on AI as a solution to optimizing the creation of game worlds and content as a faster process.
Also in generative AI Google has launched its service “Genie 2” that is an AIs that can generate playable virtual worlds based on a single picture. However, what such imaginations present is still in the experimental stage, as Matt Piscatella of Circana points out. AI definitely has the potential to lower production costs but the question is whether the companies developing these engines have been able to achieve the results that impact the gamer.
There is a possibility that such overwritten text may look as if it was written by a machine and therefore might once again not fetch the sort of atmosphere gamers are looking for. As far described by Piscatella, the players tend to dismiss the perceived fake or less effortful. Video game as a business is set to advance into 2025 and to achieve this, the industry will need to foster AI integration that will cut across all key activities, while ensuring the ultimate goal is to deliver value to its consumers.
The Rise of Portable Consoles: A New Era in Gaming
Nintendo’s portable home console, the Switch, has also risen as a force since its launch in the last fiscal year 2017. The sharpest feature of the PSVita is its functionality to move from in-between TV play directly to on-the-move gaming has set a standard which seen other giants in the industry borrow from it. To this both Microsoft and Sony have responded in affirming that they are also developing portable gaming devices owing to the increasing market demand.
Last month in an interview with Bloomberg, head of Xbox, Phil Spencer, affirmed that Microsoft in fact is working on a portable console to rival the Switch. This move is done in line with the general shift of developing all round portable gaming device to suit those individuals with interest in mobile gaming. However, Sony which produces PlayStation consoles is also developing a similar gadget which shows there will be stiff competition in the portable gaming consoles’ market.
Matt Piscatella, an analyst at Circana, suggests that the rise of portable consoles directly addresses one of the key demands from gamers, particularly younger players: to gain the opportunity of playing the desired games at any place and at any time. As mobile gaming is gaining its feet in the gaming industry, the stationary home consoles are now on crossroads of feeling the shift and adapt into more transportable form factors for the younger generation of gamers .
Simon Carless of the business called GameDiscoverCo, pointed to the established commercial agenda in these Portable Consoles. Companies want their platforms to sell games to gamers and to make sure games can be played across the firm’s devices. Steam Deck by Valve is the perfect example of the idea of portable consoles that can let play on every platform without interruption.
Finally, the increased focus of Microsoft in recent marketing campaigns on “cloud gaming” can be also pointed as the part of this trend. Cloud computing provides flexibility as compared to traditional gaming modality because players can access games on many devices as long as they have an internet connection. Toward the future, surely, cloud gaming will become an important segment for portable console evolution.
The Shift to Digital: The Decline of Physical Media
There is still just over 5% of the funds flowing to the physical content while over 95% is focused on the video games with the consumers’ money, Data analyst Matt Piscatella. This progression has been adorned with the help of online distributing networks, meaning players do not require discs and/or cartridges for games as before.
The future of gaming will be ANZ, digital from end to end, says Simon Carless of GameDiscoverCo. He uses examples from the shifting App Store ecosystem, iTunes, digital downloads, streaming, and cloud based gaming as examples of this transition. But as Carless points out, there is still some resistance especially from Nintendo which up to now still promotes game discs.
Secondly, areas where there is limited connectivity present problems to the use of digital gaming in those areas. First-person shooters such as those we have just looked at are reliant upon efficient downloading so that data can be processed rapidly on company hardware; high bandwidth, whilst enjoyed by domestic users in developed countries with easy and immediate access to large bandwidth pipes such as those in the gamer’s home, may not be easily attainable by rural locations or developing worlds where the capability for huge download quantities necessary for best game play is still something of a luxury.
However, barriers due to technology suggest that digital content will eventually triumph as the shrinking of technology persists. The digital downloads that let gamers play today will only increase with time while sales of games in physical form will only dwindle into the future of gaming.
The Complex Future of the Gaming Industry
The recent release of Ballistics mode by Epic Games in reference to Counter-Strike and LEGO Fortnite Brick Life shows its intent not only to capitalize on this success. Enoshima said this move demonstrates that the company is keen on preventing its players from becoming bored with the content by offering new material that taps into the latest trends in gaming.
In the view of analyst Matt Piscatella the idea for the strategy is to build what he called “walled gardens” to keep consumers addicted to one particular ecosystem. This approach has been well understood in the platforms like Roblox, where users are pulled into long term engagement and they cannot switch to other similar products/set ups. This helps in building a specific pool of users regularly since they go back to the location when developing that application or game.
Based on this, and assessing the data in the upcoming years up to 2025, the major contender to Fortnite, which is GTA 6 from Rockstar has potentialities. Piscatella thinks this game, plus another Nintendo Switch, could disrupt the market . But such a strategy of large releases also has its drawbacks, which the industry is already experiencing.
‘According to Piscatella it is dangerous to focus a total years activity on two or three primary products.’ Should GTA 6 be delayed or underdeveloped, or should the new Nintendo Switch prove uncompetitive, the state of the gaming industry may turn ‘very complicated.’ This situation makes the list vulnerable to fluctuations due to the high reliance on a limited number of titles.
The future of gaming seems bleak, at least for the near future but it also seems evident that to be a developer/publisher one has to work in constant high stakes. The obsession with key IPs and the principle of “closed ecosystems” will define the further development of the game industry, which means it can become both a bright and a rather risky period for both the gamers and the your companies.
