Video game developers in Asia are racing to apply artificial intelligence technologies to their characters to give users more intuitive interactions and immersive experiences.
Krafton of South Korea is working with US giants like Nvidia and OpenAI, while Chinese players including Novaserene Entertainment and NetEase are powered by DeepSeek, which surprised the world with its advanced yet affordable large language model early this year.
Krafton, South Korea’s biggest game developer by market value, says it has installed a small language model (SLM) into its new simulation game, enabling characters to act and respond naturally to various situations.
“We made such a game for the first time in the world as it can respond and act naturally to various situations in a game by installing an SLM,” Lee Kang-wook, head of the company’s deep learning division, said in a recent interview.
Krafton decided that its games would run on users’ computers rather than on the cloud to save on costs and energy, Lee said, which meant compressing huge amounts of data to a manageable size. Chipmaker Nvidia helped the company resolve the technical challenges of this approach, he added.
“So, we are very proud of this, and Nvidia is also pleased with the project,” Lee said. “I always tell the team that we are writing the history of video games.”
The Seoul-based company said that the characters in its life simulation game InZoi released in March respond dynamically to real-time events based on their “personality,” creating unique and more immersive experiences. The approach appears to be a popular one, as the game sold more than 1 million copies in its first week after launch, according to the company.
But despite a successful debut, Lee said he was still anxious about how quickly Chinese players are chasing the company. “There are many Chinese companies which are doing very well. We’re always on our toes.”
Novaserene is one of them. When ChatGPT was released in November 2022, veteran Chinese game producer Zhao Tongtong was stunned by its potential to transform the way games are made and played. Zhao left his mobile gaming company and launched Novaserene in 2023.
The Beijing-based startup backed by Ant Group is integrating AI into its games. For example, non-player characters (NPCs) whose movements and speech were previously pre-programmed can now be driven by AI algorithms, enabling them to respond to the virtual environment like real humans.
Such complex interactivity was “nearly impossible to simulate” with logic-based coding, said Zhao, but is increasingly becoming a reality with AI technology.
“We’re aiming for the ultimate goal. We hope to create a 3D game world where, powered by AI, your virtual characters can behave just like real people,” he said. “And beyond just the characters, we want the entire environment to respond dynamically. … All of it should move closer and closer to reality under AI’s guidance.”
Novaserene joins major Chinese game developers in the race to adopt AI technology, especially after DeepSeek boosted confidence in using homegrown AI for various applications. NetEase has introduced NPCs powered by DeepSeek and other AI models in its multiplayer game Sword of Justice. The company recently announced that an international version of the title will be released outside China.
The rush to apply AI to games, however, may turn into a race to stand still. Charlie Chai, an analyst at 86Research, said AI features may eventually become commonplace for major new titles, negating any “edge” that using the technology might have yielded. The cost savings from generative AI are currently limited as well, as the “majority of game development work is still beyond the competency of current technology.”
Krafton, meanwhile, is testing how far AI tech can be applied beyond the computer screen.
Lee, who is also a professor of electrical and computer engineering at the University of Wisconsin-Madison, said the AI tech used in games can be extended to the robot industry by giving physical forms to characters developed and tested in games.
“If we replace the virtual bodies of characters in games [with physical forms], it’s the same as robots. So I am thinking of leveraging this technology into smart robots with AI later,” Lee said. “I’d like to take this well-working brain [out of game characters] and put it in a different body and imagine what other synergies there might be.”
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.