Video games often represent the frontier of any new technology. Many of the most popular applications in the initial iPhone app store were games. Today’s virtual reality devices are dominated by video games.

Artificial intelligence seems poised to upend the video game business and entertainment more broadly.

On the third episode of our six-part Cerebral Valley podcast series, Max Child, James Wilsterman, and I game out how artificial intelligence could reshape the media we consume.

It helps that Max and James are the co-founders of Volley, which builds AI-enabled games. They develop many of the most popular voice games on the Amazon Alexa and smart TV platforms like Roku.

Max and James have been deep in the trenches of conversational-style gaming and have spent a lot of time thinking about how humans interact with ever smarter computers.

In the second half of the episode, I talk with Menlo Ventures partner Amy Wu, who focuses on gaming and consumer investments, and Keith Kawahata, a former executive at Wargaming, AppLovin, and Kabam, who now has a stealth artificial intelligence gaming startup.

Wu helps to articulate a three-part thesis on how artificial intelligence might change the gaming business. (1) artificial intelligence will help with the creation of the game art and graphics, (2) AI can create more sophisticated non-player characters, and (3) AI can help write the code of the game itself.

One of the things that I was struck by from the conversation is that games may have a big leg up in implementing artificial intelligence over movies — because people interact so much more with a gaming, giving it tons of data to react to. While TikToks can learn what small populations of people like and what an individual likes over a long time, a game could learn a lot about a user in a single play session.

Of course, there are real hurdles left standing. Most notably, text-to-image generation so far is mostly two-dimensional. Despite everything that’s happened, image generation models aren’t just whipping out 3-D levels that are ready to play.

And it could be a while until non-player characters are as smart as humans. But imagine playing a game of Grand Theft Auto or Red Dead Redemption and the characters roaming around the game are self-aware agents with their own thoughts and drives.

Give it a listen

P.S. I’m on my honeymoon right now in Japan. I was working frantically to record these episodes before I left. My chief of staff Riley Konsella is sending the episodes out for me while I’m gone. If you need anything while I’m away, you should email Riley.

Thanks in advance for being understanding that this newsletter is slowing down for my honeymoon. I’m going to dedicate myself to relaxing over the next two weeks so that I come back hungrier than ever.