Artificial Intelligence (AI) in Games Market to Grow by USD 27.47 Billion from 2025-2029, Boosted by AR and VR Game Adoption, Report on AI’s Role in Market Transformation- Technavio

NEW YORK, Feb. 10, 2025 /PRNewswire/ — Report with the AI impact on market trends – The global Artificial intelligence (AI) in games market size is estimated to grow by USD 27.47 billion from 2025-2029, according to Technavio. The market is estimated to grow at a CAGR of  42.3%  during the forecast period. Growing adoption of ar and vr games is driving market growth, with a trend towards increasing emergence of cloud gaming. However, network latency in between games  poses a challenge. Key market players include Capcom Co. Ltd., Charisma Entertainment Ltd., COGNOSPHERE PTE. LTD., Electronic Arts Inc., Gameloft SE, Google LLC, Konami Group Corp., Latitude, Microsoft Corp., NetEase Inc., Nintendo Co., Ltd., NVIDIA Corp., PrometheanAI Inc., Side Effects Software Inc., Sony Group Corp., Take Two Interactive Software Inc., Tencent Holdings Ltd., Theai Inc., Ubisoft Entertainment SA, and Unity Technologies Inc..

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Market Driver

Artificial Intelligence (AI) is revolutionizing the games market with trends like AI-generated content, Virtual Reality (VR), and Augmented Reality (AR). Games are now using AI algorithms to create 3D representations, enhance player experience on platforms like Microsoft HoloLens 2, and improve sensor technology. AI technologies, including machine learning and neural networks, power advanced features like ray tracing and realistic physics simulations in games like Cyberpunk 2077, Battlefield V, and Red Dead Redemption 2. Network latency is a challenge in multiplayer gaming, but AI-enabled platforms and deep learning ML models are helping to analyze data for prediction and improve matchmaking. GPUs and CPUs are essential for processing power, while real-time AI processing is a key factor in mobile games. Expertise in AI is in demand for developing AI-driven animation techniques and anti-cheat systems. Market growth factors include 5G network, cloud gaming, edge computing, and smart gaming consoles. AI Dungeon, Voyage platform, Pixel This, Things, Loom, and Mediaeval Problems are leading the way in AI-driven gaming innovations. 

Cloud gaming, which allows access to remote server-based games through Internet-connected devices, is gaining popularity due to the rise of social media and mobile gaming. This technology eliminates the need for new hardware or complicated setups, such as game discs, installations, or patches. Grid computing powers the streaming of game content to users via wired or wireless broadband connections. Cloud gaming’s cost-effective pricing structure appeals to non-core gamers, expanding its reach beyond traditional console gaming. The convenience and ease of use make cloud gaming an attractive option for gamers. 

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Market Challenges

• The AI in Games market is experiencing significant growth, with advancements in AI-generated content, virtual reality (VR), and augmented reality (AR). Microsoft HoloLens 2 and other AI technologies, such as machine learning and neural networks, are revolutionizing gaming. However, challenges remain, including network latency, processing power, and real-time AI processing for multiplayer gaming and matchmaking. AI-enabled platforms like Euphoria and Realistic physics simulations are improving player behavior and environmental interaction. Market growth factors include cloud-based services, smart gaming consoles, and expertise in AI. Companies like Cyberpunk 2077, Battlefield V, and Red Dead Redemption 2 are utilizing AI for image upscaling, prediction, and ML models. Future trends include deep learning, data analysis, and AI-driven animation techniques. The market is expected to grow, driven by 5G network, cloud gaming, edge computing, and AI Dungeon, Voyage platform, Pixel This, Things, Loom, and Mediaeval Problems.
• The global AI market in games faces a significant challenge due to network latency. This delay between a player’s action and the game server’s response can negatively impact gameplay experiences, particularly in online multiplayer games. Latency is influenced by factors such as internet connection quality, player-server distance, network infrastructure, number of users, and server load. Reducing network latency is crucial for providing optimal gaming experiences and ensuring player satisfaction. Companies in this market must invest in improving network infrastructure and optimizing server performance to minimize latency and enhance the overall gaming experience.

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Segment Overview 

This artificial intelligence (ai) in games market report extensively covers market segmentation by  

• Type
  • AI Enabled Platforms
  • AI Enabled Games
• Technology
  • Machine Learning
  • Natural Language Processing
  • Computer Vision
  • Robotics
• Geography
  • North America
  • APAC
  • Europe
  • South America
  • Middle East And Africa
• Game
  • Action
  • Adventure
  • CasualRacing
  • Simulation
  • Sports
  • Strategy
• AI Type
  • Machine Learning
  • Deep Learning
  • Natural Language Processing
  • Computer Vision

1.1 AI enabled platforms-  Artificial Intelligence (AI) platforms are essential collections of tools that facilitate the creation, testing, implementation, and maintenance of deep learning and Machine Learning (ML) models in the gaming industry. AI technology enables machines to execute tasks beyond human capabilities, such as data analysis, prediction, and action-making, more efficiently and accurately. Developers utilize AI platforms to create advanced games, build environments, characters, and plots more rapidly. Additionally, AI’s ability to analyze player behavior and data offers valuable insights into player preferences, leading to customized and engaging experiences. Leading companies like Microsoft and Google are at the forefront of this change, offering AI-driven platforms and tools that are revolutionizing game production. Furthermore, AI is enhancing game realism through AI-powered graphics and ray tracing, resulting in lifelike scenes. Real-time interactions between human gamers and AI-powered virtual characters are also made possible by these platforms. The increasing adoption of AI platforms in the gaming industry will drive the growth of this segment and market during the forecast period.

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Research Analysis

The AI in Games market is revolutionizing the gaming industry by integrating advanced AI algorithms, machine learning, and neural networks to generate and dynamic gaming experiences. AI-generated content includes 3D representations, virtual reality (VR), and augmented reality (AR), enhancing the realism and interaction in games. Microsoft HoloLens 2, with its AI technologies and sensors, leads the way in AR gaming. AI enables prediction and data analysis, reducing network latency and improving gameplay. GPUs and CPUs power AI-enabled platforms, enabling real-time image upscaling and ray tracing for enhanced graphics. Games like Cyberpunk 2077, Battlefield V, and Red Dead Redemption 2 utilize AI middleware systems like Euphoria to create lifelike characters and environments. Deep learning ML models are used for character behavior and decision-making, adding depth to the gaming experience. AI is transforming 3D games into intelligent, interactive, and experiences.

Market Research Overview

The Artificial Intelligence (AI) in Games market is experiencing rapid growth as developers integrate advanced AI technologies to create more and interactive gaming experiences. AI-generated content, such as 3D representations and realistic physics simulations, is revolutionizing the industry. Virtual reality (VR) and augmented reality (AR) games are utilizing AI algorithms to enhance user experience, with devices like Microsoft HoloLens 2 leading the way. Sensors and AI technologies like machine learning and neural networks are powering these advancements. Games like Cyberpunk 2077, Battlefield V, and Red Dead Redemption 2 are using AI to improve player behavior and environmental interaction. Network latency is being addressed through AI-enabled platforms and real-time AI processing. Deep learning and ML models are being used for data analysis and prediction, while GPUs and CPUs provide the necessary processing power. Realistic physics simulations, AI-driven animation techniques, and expertises in AI are key market growth factors. Cloud gaming, 5G networks, and edge computing are also driving the market forward. AI Dungeon, Voyage platform, Pixel This, Things, Loom, and Mediaeval Problems are some of the innovative companies leading the charge in this exciting field.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Type
  • AI Enabled Platforms
  • AI Enabled Games
• Technology
  • Machine Learning
  • Natural Language Processing
  • Computer Vision
  • Robotics
• Geography
  • North America
  • APAC
  • Europe
  • South America
  • Middle East And Africa
• Game
  • Action
  • Adventure
  • CasualRacing
  • Simulation
  • Sports
  • Strategy
• AI Type
  • Machine Learning
  • Deep Learning
  • Natural Language Processing
  • Computer Vision

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

About Technavio

Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.

With over 500 specialized analysts, Technavio’s report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio’s comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

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SOURCE Technavio