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Hello one and all and welcome to another edition of AI and Games. I had a lot of fun last week reviewing Mike Cook’s book all about procedural content generation, Next Level (on sale now). It was a palette cleanser after a few heavy weeks of reporting on Xbox reshuffles, the RAM crisis, and more efforts to punt Generative AI into the market.
Well, it was a short reprieve. For this week we have a mix of news stories, but most of the big talking points came from the quarterly financial reporting from Sony and Nintendo. Including confirmation of price hikes for the Switch 2, PlayStation’s strategy for Generative AI adoption, and how both platforms expect a decline in hardware sales courtesy of price increases and AI’s impact on component costs.
Before we get into it in earnest, a quick mention that we will not have a new issue next week as I’m bouncing between speaking engagements at conferences, and enjoying a much-needed vacation. My plan is to return on May 27th, but this may get pushed back due to a client obligation which will have me fly out to the US that same week.
Either way, we’ll have a short break, and then things will kick off in earnest in June with a bunch of new stuff to share!
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AI (and Games) in the News
Lots of stuff in the news this week, let’s run through it.
EVE Online Developer Returns to Independence, Partners with Google Deepmind [VGC]
CCP Games, the creators of much-beloved EVE Online have been bought back by their management from the current owners Pearl Abyss, who bought them for $225 million back in 2018, and now selling them for $120 million. This reset will have no impact on their current studios and staffing for now.
What is most interesting is that Fenris Creations, the new name for the company, has signed into a research partnership with Google DeepMind, who have acquired a minority stake in the company. With the idea to both provide versions of EVE Online for research purposes, while also with the potential for DeepMind’s work to have an impact on future games.
This is quite an exciting opportunity, and one that DeepMind could use to support both sides of the coin. DeepMind have previously worked on the likes of the SIMA project - which I reported on this time last year - where they work with games studio to develop general purpose AI that learns from playing all of these different titles. It also aligns with conversations I’ve had with some studios, including with DeepMind themselves, about their aspirations to do more interesting work in the games space. More on this as it happens!
Firefight: Gauntlet Announced for Halo Infinite [Halo Studios]
Y’know it’s nice when studios ship new Game AI features. The criminally underrated Halo Infinite has announced Firefight: Gauntlet, a modified version of the long-running Firefight mode but it pivots to new encounters on new maps between waves. Considering Halo Studios said they were done with updating this game, this makes me rather happy!
Hitman’s Season of the Royal Runs Until End of May [IOI]
With 007: First Light due out at the end of the month, what better time to bring back the Le Chiffre, Mads Mikkelsen’s James Bond villain, as an elusive target in Hitman: World of Assassination. Season of the Royal Ace offers a bunch of fun challenges and bonus cosmetics for both Hitman and Bond should you play it this month. I need to check this out before flying off at the weekend.
Nintendo Announces Price Increases for Switch 2 Thanks to “Market Conditions” [Nintendo]
Well, it had to happen sooner or later. Alongside their most recent fiscal results, Nintendo have announced price increases for the Switch, the Switch 2, and the Nintendo Switch Online service in Japan that kick in over the summer. Plus the Switch 2 will also see a price hike for the US, Canada and Europe in the fall. Starting September 1st, a Switch 2 will set you back $499.99 in the US (up $50) and €499.99 (up €30) in Europe. No price change for the UK has been confirmed yet, but you can expect it to be somewhere between the £30-£50 mark. The Switch 2 RRP in the UK is £395.99, so I would expect it to be somewhere in the region of £429.99-£449.99 - aligning it with the cost of previous and current game bundles such as the Mario Kart World and Pokémon Pokpopia sets.
While this is mentioned as being the result of “market conditions”, one doesn’t need to think too hard about those conditions might be. The ongoing chip shortages brought by AI hyperscalers is continuing to cause problems and will continue to do so for the rest of 2026 at least. After all Sony are in a similar position and as we’ll discuss in a moment they’re far more open as to why this is.
This is the first price increase for the console itself after rising the cost of peripherals in the US last year. I suspect Nintendo were able to hold this off until now thanks to a significant proportion of their original Switch 2 stock being manufactured and shipped in late 2025. So they manage to stave it off for over a year.
If you missed our deep-dive into why AI is causing price increases for RAM, GPUs, CPUs, SSDs and more, be sure to check it out. We received some great feedback on this one. In the meantime, if you’ve been on the fence about getting a Switch 2 hoping for a price drop, now’s the time to go all-in frankly. I wouldn’t expect any meaningful price drop until 2028 at the earliest.
Darkest Dungeon Devs Will Not Use Gen AI to Reproduce Narrator’s Voice [Reddit]
Using Generative AI for voice work is a hot topic, and one that I’ve discussed in the past with regards to Arc Raiders. One argument given is its a useful way to reproduce the voice of those that have sadly passed away. I’m sure James Earl Jones would have been thrilled his voice was used for all sorts of racist and sexist comments when Darth Vader dropped in Fortnite huh?
Well Darkest Dungeon developers Red Hook Studios have came out and stated that despite being offered the rights to reproduce the voice of Wayne June - who sadly died at age of 77 last year - they refused them and have no intention of doing so. Responding to a thread on r/darkestdungeon, the series creative director Chris Bourassa had this to say on the issue:
“In one of his last emails to me, Wayne gave us permission to train an AI on his voice, something he’d staunchly opposed prior to the end. We’d never asked to do it. I think he was trying to put the game/team/fans first - offer us a ‘way forward’. I declined, and we donated to his family anyway.
I would never, ever erode his incredible and timeless performances by teaching a machine to sound like him. His voice and delivery was *human, and I’m forever grateful I got to write for him.”
Y’know this makes me want to boot up Darkest Dungeon. Despite trying to start that game three times, I am still none the wiser at to how to play it. Maybe I should livestream it sometime and get support from the audience?
Sony’s Plans for AI ‘Empowerment’
Nintendo wasn’t the only Japanese gaming giant to announce fiscal results last week. The Sony Group dropped their financial results for the 2025/26 fiscal year, including a bunch of information related to the performance of various parts of their business. This led to some interesting tidbits on the Gaming & Network Services (G&NS) division, i.e. PlayStation. While things continue to perform fairly well, some areas are not exactly rosy, and AI is both the root cause and apparently, the solution?
RAM Prices Are Impacting PS5 Sales
Given the past year in which everything is becoming more expensive thanks to AI hogging the RAM - this is the third time we’ve brought this up in this issue alone - Sony was one of the first to up the price of all SKUs of their consoles. Now with this data we’re seeing the reality this is having on their overall sales figures.
While the overall FY results look pretty solid, Q4 saw significant downturn in sales and operating income. While operating income is down due to a significant write-down of the assessed worth of Bungie (which was bought in July 2022 for a frankly ridiculous $3.6 billion), the real concern is in sales. Sales of both software and hardware is largely flat year-on-year, but most notable is the depreciation of PS5 sales.
PS5 sales appear to be slowing down and appears to be causing a drift between like-for-like sales of the PS4 during the same period of its lifecycle. As noted in the slide above, this is a “decrease in sales of hardware due to a decrease in unit sales”, which as noted in the following slide is driven by the AI RAM crisis. In their 2026 forecast they expect an overall decrease in sales due to more first-party titles, but also that they “plan to base PS5 hardware sales in FY26 on the volume of memory we can procure at reasonable prices”. So in short, they hope to sell relative to the amount they have to manufacture, but are wary of sales numbers given they are tightly correlated with the going price of memory.
AI is the Future of PlayStation(?)
Meanwhile in the accompanying Corporate Strategy presentation, AI was very much at the heart of Sony’s longterm plans. They see it as an opportunity as a tool not to replace artists or creators (their words), but to ‘amplify’ human imagination. In fact they double down on this by insisting “memorably experiences will always be created by humans and enjoyed by people.”
It’s all very flowery language to say they expect (Generative) AI will help with value creation and growth by minimising costs for various parts of the business. So nothing new there, it’s the same thing we hear again and again, but what substance is there to this argument?
Now before I continue, it’s worth stressing that Sony AI - their dedicated R&D division - has been around for some time now and has done some really interesting work. A lot of is largely behind the scenes, though two examples I can point to is first the ‘Sophy’ AI in Gran Turismo 7 which I’ve written about before, but also we had Jaden Travnik from Sony AI present at our 2025 conference on their workflow and processes in training agents using reinforcement learning.
During the first breakdown of this AI strategy delivered by Sony Group President and CEO Hiroki Totoki, details of how this works in practice is unsurprisingly thin. Only that Sony Pictures have invested more than $50 million in AI in recent years, including tooling for production planning, content production, data analytics and 3D conversion. Plus Sony Music is pushing for industry-wide standards for labelling AI content as means to ensure transparency for customers - after all AI slop has rushed to infect platforms such as Spotify in recent years. Plus they discuss how they’re working on an initiative alongside Bandai Namco on how to use Generative AI in ways that grapple with the “lack of consistency and controllability” they have seen in previous years. It strikes me this is to address issues of style in specific domains, given Bandai Namco often works with Sony on adaptations of their manga and anime properties.
What I find interesting about the presentation up to this point is how… guarded it is. There’s both a push towards showcasing their efforts for innovation while also giving recognition to the frustration, distrust and apathy that people have towards Generative AI. At a time where Japan’s government is really pushing for companies to show they’re embracing AI - a point we discussed in a previous issue - it’s interesting the tightrope they walk in the messaging.
AI @ PlayStation
With the presentation passed over to Sony Interactive Entertainment CEO Hideaki Nishino, we get into a lot more detail on where AI is being used in their game productions. A big point they hammer home is how (Generative) AI will help in “lowering barriers”, meaning they hope it will mean games come out faster. But also they acknowledge that it will also mean more content is coming to market. Nishino makes mention of how PlayStation as a platform must help “players find the right content in an increasingly crowded landscape”. So not only will PlayStation be using AI to get content out faster, but they need to then mitigate against the wave of slop they expect will hit their storefront - and they state they expect this means that people will double down more on established IP and franchises.
Again with this whiplash of messaging… it’s fascinating!
They get into the weeds on some of the AI tech they’ve been using, notably ‘Mockingbird’ which helps animate facial models based on motion capture data. A project that’s been used in work by Naughty Dog and San Diego Studio, with it being part of Horizon Zero Dawn Remastered. Now this makes sense, because mapping mocap data to facial models is a fiddly and awkward job that requires animators to iron out all of the edge cases that crop up. It’s a repetitive and labour-intensive workload that lacks any creative spark for the most part. Sure when the mocap is aligned then additional work might be done to add more variety or personality to the performance, but the process of just getting it running error-free is not where the creativity lies. So it makes sense!
Plus some mention is given to the above slide where an AI tool has been built for the modelling of hair such that it is successfully animated. This addresses the issue that animating hair in games is really difficult, and making it look natural is a real challenge. Here the emphasis is to help accelerate the process of getting the hair to look and behaviour correctly in-engine. For me this is somewhere in the middle, in that I’m curious how much flexibility or control an artist has in making the hair they want and then getting that quality in the animation. After all, I’m not a character artist, I can’t speak to that experience, but again we’re dealing with complex processes to fix technical issues that emerge in the final product.
GT Sophy also gets a bit of lip service, but largely to hammer home how their AI teams are working with studios across PlayStation Studios to support NPC development. Plus how AI curation and support on the store has enabled for ongoing incremental revenue.
The last thing they mention is how their AI-upscaling tech built into the PS5 Pro - PlayStation Spectral Super Resolution (PSSR) - is helping deliver on high-quality visuals both for in-house titles such as recently-released Saros by Housemarque, but also third-party titles such as Resident Evil: Requiem. This is something they’re highly committed to and keen to move forward.
Does this AI Initiative Stack Up?
Having read/listened to all of this, what do I make of it all? Does this make sense? Are they heading in the right direction? For one thing I do feel what they delivered at least had some substance, and not like that god-awful EA presentation from 2024 which was not only incredibly vague and vapid but also sported a number of tech demos that I genuinely believe were fake. There was nothing about it that struck me that Andrew Wilson and the rest of the executive pack had any clear idea of what they were going to utilise Generative AI for beyond placating investors. Despite the very well and fantastic work that EA’s studios and their R&D division SEED do in deploying cutting-edge AI into their worflows.
The thing that really helps support Sony’s case is that they actually have something of substance to show, and that it has been deployed already in commercial projects. We knew about things like GT Sophy and PSSR of course, and I had heard about what is now called Mockingbird a while back, but it’s good that they show things that deliver material value for them. That said, the evidence of technology being adopted that they’re willing to share and doesn’t upset the wider world is still rather thin, and I think it’s important in this modern climate to continue to engage with users about what this tech does and make a case for why it helps.
Considering a lot of the conversation of late about how Sony is doubling-down on first-party titles solely on PlayStation and cementing their existing position in the market, the AI strategy seems very much to reinforce that. First-party studios getting access to tools to support high-quality, high-fidelity graphics and gameplay. Hair systems and mocap alignment tools very much fall into the bid-budget AAA work that Sony is known for, and then having that all get a boost courtesy of PSSR. Then of course having curation systems that point you towards ‘trusted’ IP and franchises. It’s all about delivering the best for PlayStation and keeping you on PlayStation.
But overall, the thing that I really took away from this was the level of caution being explored courtesy of the language used. Just a few weeks ago we had Microsoft state they’re rethinking how AI is deployed at Xbox (then filled their management with AI product people, so y’know, take that for what it’s worth), and now Sony dancing around the issue. I’ve been quite vocal about how tone-deaf some companies have been on these issues in the past (see EA and Krafton) so it’s interesting to see this slightly more reserved use of language to express their enthusiasm. Especially when you consider most of these companies make these gross faux-pas because they’re presenting to investors, and are happy to say stuff that will have be scrutinised by every consumer-aligned publication out there (including this one).
I guess when AI is the reason PlayStation is struggling to shift hardware, you don’t want to run the risk of it also putting people off buying the software too!
Wrapping Up
One last thing, I saw a trailer dropped for the Aliens: Fireteam Elite 2, with a proposed launch date of sometime around this summer. Fireteam Elite is a PVE title where you squad up and face off against hordes of xenomorphs to reach your objective.
While far from perfect, the first game back in 2021 was rather limited, but still a good blast to play with a couple friends. Well worth a discount purchase to burn through over a weekend. But it felt like it needed a bit more work to elevate to something more substantial. Fingers crossed Cold Iron Studios and Daybreak can deliver!
Okay, I’m off to enjoy get some chill time and rest. We’ll be back later in the month with a new video, hopefully some 2026 conference announcements, and a new project we’re excited to share with you over the summer!