Is AI the Future of Game NPCs? An Overview of NPC Intelligence

Cindy X. L.
4 min readJul 22, 2024

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Below is the script for my latest YouTube video.

There’s been a lot of buzz lately about using AI to make NPCs in games. These NPCs sound intelligent with the help of AI. Or, they can act on their own, walking and talking to each other in a town.

An intelligent character created by Inworld AI.

Is this really the future of gaming?

What is NPC intelligence?

Traditionally, game developers use pre-written scripts and decision trees to define NPC behaviors. That’s a lot of game content to prepare and it runs out quickly.

Now, imagine an AI ‘brain’ that can generate and control these content, to quickly create dynamic NPCs to interact intelligently.

Timeline

Back 7 or 8 years ago, some game devs already started exploring.

A presentation by Mike Lewis at GDC 2015.

People got more hopeful when ChatGPT was released in 2022; it’s a powerful AI model to chat with humans.

Using ChatGPT to build a simple AI dungeon game.

You can plug ChatGPT into your game. You can also add some memory to it, for example, to remember the storyline of the character, the rules of the game world, etc.

In fact, last year, researchers from Stanford University brought this idea to the next level. They published a research paper on how to populate a virtual town with AI characters, each powered by ChatGPT. These AI characters can perform daily activities autonomously and interact with each other.

This paper inspired many entrepreneurs to build in the space. They envision AI NPCs to

  • Have natural conversations with players
  • Adapt to player choices and preferences
  • Remember past interactions
  • Act more human-like and fun to interact

Startups

Until today, many startups are trying to pack such AIs into a SAAS product for game studios. Some of the startups have raised tens of millions of money.

  • Inworld AI: Founded in 2021, Inworld is one of the more prominent startups in this space. They’re developing AI technology to create more dynamic and interactive NPCs for games and more.
  • Convai: is developing conversational AI technology; they have a lot of video demos on YouTube, so feel free to check it out.
  • Artificial Agency: is founded by former Google researchers; they’re working on an AI engine for NPC behavior.
  • Character AI: While not exclusively focused on gaming NPCs, it’s developing conversational AI that could be applied potentially to game characters.

Sounds amazing, right?

Before I mention some major hurdles, I’ll tell the story of RCT AI. It’s a startup company that wanted to provide such AI solutions to the game industry, about 5 years ago. They had a strong team, super experienced.

RCT AI’s early demo for intelligent NPCs

Challenges

  1. Narrative Control: Open-ended AI could easily reveal plot points too early or give inconsistent information. For story-driven games, this is a nightmare.
  2. Resource Intensive: Running complex AI models for every NPC would require significant computing power.
  3. Genre limitations: AI-driven NPCs may not suit all game types. While they could enhance open-world RPGs, they might be unnecessary for other genres.
  4. Scalability across games: Developers might need to customize AI NPCs for each game, making it expensive and hard to scale as a business.

While AI-driven NPCs sound cool in theory, the resources required to implement and maintain this technology might not justify the marginal improvements in gameplay.

Many others are hesitant due to the risks involved. Content generated on the fly is hard to control and requires extra work to comply with laws.

Here’s the kicker — major game studios might just develop such tech in-house if they really want it. And RCT AI, which we mentioned, turned to make their own game and they seem to have some progress.

Conclusion

So, will we see some games experiment with AI NPCs? Absolutely. Is it gonna become the industry standard? Hard to say.

A survey this year showed only 21% of game devs expect AI to have a positive impact on the industry. 42% had significant ethical concerns (GDC 2024). Overall, game developers appear open to incorporating generative AI in their games, but there’s still some hesitance.

Remember, games are about fun first.

Consider the popular game Animal Crossing New Horizon. These characters operate on relatively simple, pre-written scripts, far from the cutting-edge AI we mentioned. Yet, players form deep attachments to these digital neighbors. They happily talk to the villagers, give them presents, celebrate their birthdays, and feel sad when a villager moves away.

Player celebrating a birthday with villagers in Animal Crossing.

NPCs don’t necessarily need advanced AI to be engaging. Instead, well-crafted personalities and the illusion of relationships can create meaningful connections. We’ll see.

Would you want to chat with AI NPCs, or do you prefer classic scripted interactions? Let me know in the comments!

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Cindy X. L.

Tech influencer (125k on Weibo), Columbia alum. This is my tiny corner to write about AI, China tech, and creator economy. Views are my own.