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The Rise And Rise Of AI Gaming Industry

Latitude, a startup building games using AI-generated infinity storylines, raised $3.3 million in seed funding earlier this month. Founded in 2019, Latitude has secured a total funding of $4.1 million so far. The startup specialises in developing AI-powered games geared towards player freedom and self-expression. 

Latitude’s AI Dungeon uses GPT2/3 language models to develop a procedural, emergent text adventure game, where the generative models fill in actions in the background. The impressively open-ended AI Dungeon was launched in December 2019 using the GPT2 model.


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Latitude is not the only AI gaming startup flush with funds., founded by French mobile game studio Happy Blue Fish in 2017, raised a seed funding of €300K in 2017, followed by the second round of seed funding of €200K, managed by AGORA (also an investor) in 2018. offers an efficient, plug & play, scalable SaaS platform to help mobile game studios make more revenue through increased player retention. It uses machine learning and predictive analytics to personalise each player’s experience in the game in real-time. 

Osmo, an interactive play company, has raised $32.5 million in funding. Recently acquired by Byju’s, the gaming company is built around a proprietary Reflective Artificial Intelligence. Osmo expands the playing field and encourages creative thinking and social interaction, allowing any object such as a pen or paper to interact with the digital device. 

Gosu Data Lab, another AI gaming startup based out of Lithuania, raised $5.1 million in funding. Focused on gaming data and AI, it builds a platform that applies the computer’s understanding of the gaming data to help gamers play better. It also develops voice assistants to help gamers. 

Danish artificial intelligence firm closed a $1.7 million seed funding round in February last year. Founded by veterans in the areas of games, psychometrics, and artificial intelligence, delivers game technology that accelerates game development and enhances player engagement. The startup has reportedly used the fresh capital to continue the development of its AI playtesting tech. By deploying AI-driven player archetypes, mimics human behaviour for playtesting. Still in beta, has already secured contracts from global gaming studios.

AI gaming startup Krikey has raised a total funding of $22 million in a Series A led by Reliance Jio. Krikey’s AR game Yaatra invites users on an action-adventure journey to defeat a monster army using weapons such as bow and arrow, chakra, lightning and fire bolts. 

AI Gaming Market

AI’s groundbreaking moment came in 1997 when world champion Garry Kasparov lost to IBM’s Deep Blue in chess. Since then, companies such as DeepMind, Apex Game tools, Blizzard Environment, Rival Theory, Heroz, Spirit AI have improved game assets, behaviours, gaming environments etc. 

According to a report, the global gaming industry is expected to register a CAGR of 12% during 2020-2025. The report observed virtual reality and AI have become an integral part of the gaming industry, with players expected to spend $4.5 billion on immersive gaming in 2020 alone. The mobile gaming market has witnessed tremendous growth over the past ten years, with an approximately $100 billion market cap or 60% of the total video game market in 2021. 

One of the critical challenges for gaming companies is to attract and retain users. AI offers unique retention and player acquisition solutions to these companies. It provides immersive experiences apart from unique perspectives to engage gamers. 

The rising funding is a testament to the growing popularity of AI games, and going by the market predictions, the gaming industry is primed for a growth spurt.

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Srishti Deoras
Srishti currently works as Associate Editor at Analytics India Magazine. When not covering the analytics news, editing and writing articles, she could be found reading or capturing thoughts into pictures.

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