A group of ex-Google DeepMind researchers have developed an AI behavior engine that aims to turn traditional video games into a more dynamic experience by improving non-player character (NPC) behavior and interactions with gamers.
There are plenty of companies using AI to generate more realistic NPCs, but Canada-based Artificial Agency, which just emerged from stealth after raising $16 million in funding, is confident that its behavioral engine will help it differentiate itself from the pack.
Traditionally, NPCs are guided by decision trees and pre-written scripts, which often limit the number of outcomes the player can experience. For example, most NPCs in games respond to the player's actions with several repetitive lines of dialogue, which often feels unrealistic and boring.
Artificial Agency's behavior engine throws away this framework and turns game developers into something more like stage directors, requiring developers to give each NPC a set of motivations, rules, and goals that determine how the NPC will react to the player. The technology can be integrated into existing video games or used as the basis for entirely new games.
The Edmonton, Alberta-based startup is entering an increasingly crowded field, with competitors including Inworld, which also offers AI-generated NPC behavior, and Nvidia, which has been working on AI-powered NPCs for some time.
Meanwhile, Artificial Agency believes that integrating AI-generated NPCs into video game design is the way of the future.
“The conversation we have with these studios is not if, but when,” co-founder and CEO Brian Tanner told TechCrunch. “This kind of dynamic interaction and dynamic response that our system enables will be commonplace in games in the next few years.”
The startup recently raised $12 million in a seed round co-led by Radical Ventures and Toyota Ventures, the founders told TechCrunch. The company previously raised $4 million in an undisclosed pre-seed round from Radical Ventures, bringing its total funding to $16 million. Other investors in the latest seed round included Flying Fish, Kaya, BDC Deep Tech and TIRTA Ventures.
Anyone want AI NPCs?
A big question for many of these startups is whether game studios will adopt their AI tech. Some worry that major studios will be hesitant to develop their own tech or add generative AI to their flagship games, especially given the risk of hallucinations and that the technology is still not fully tested.
While Artificial Agency didn't name any names, it said it is working with “several prominent AAA studios” to develop the behavioral engine, and expects the technology to be widely available in 2025.
“We reached out to game studios and some of them were starting to build these actions themselves, but really they were just trying to make games,” said Daniel Mullett, an investor at Radical Ventures. “When you have 20 or 30 groups trying to build this themselves, there's an opportunity to build a platform and make it available to everyone.”
While game developers generally seem open to using generative AI in building games, some are still hesitant. Of the 3,000 game developers surveyed by GDC and Game Developer for their 2024 State of the Games Industry report, nearly half said they are using generative AI for some aspect of the development process, especially repetitive tasks. Still, only about 21% of those surveyed expect generative AI to have a positive impact on the industry, and 42% of respondents said they are “very concerned” about the ethics of using generative AI.
Mullett said Artificial Agency's founding team has decades of experience at Google DeepMind, giving the company confidence that it can build a best-in-class layer of tools to improve NPC behavior. DeepMind has a long history of developing cutting-edge AI that can play games, having developed AlphaGo, the first computer program to beat the world champion at Go.
As Google began to shift its focus to the Gemini model, Tanner and his team branched out and began developing video game agents to replace NPCs.
From NPC to Co-op Partner
In a tech demo the startup shared with TechCrunch, co-founder Alex Carney created an NPC powered by Minecraft's behavior engine (the startup didn't say which game it's currently developing.) The NPC, named Aaron, was instructed to be friendly and helpful, and given access to basic functions like movement, opening chests, digging, and placing blocks.
At one point, Carney's in-game character asked Aaron to gather supplies for a terrifying mining adventure. Though not programmed, the NPC visited multiple treasure chests to collect armor, helmets, tools, and food, and delivered the supplies to Carney's character. After returning with the bread, Carney told Aaron that he was gluten-free, and the NPC apologized and offered him cooked chicken as a gluten-free option instead.
This simple demo showed that Artificial Agency's AI NPCs could not only converse but also perform complex actions without being explicitly told to do so. Aaron demonstrated a degree of awareness, and the NPC created a unique experience without the need for scripting or programming. At the very least, this technology has the potential to save game developers time.
Will gamers end up paying the price for AI?
Tanner estimates that the AI inference cost for this roughly five-minute demo was $1, noting that it would have cost $100 a year ago. Artificial Agency expects costs to continue to fall as GPU efficiency improves and AI model optimizations continue. Currently, the startup uses open-source models such as Meta's Llama 3. In a year, Tanner expects the five-minute demo to cost less than a cent.
But who will ultimately pay these inference costs, whether they're a cent or a hundred dollars? Artificial Agency says AI NPCs won't make video games more expensive for end users, but Radical Ventures' Mulet isn't so convinced. He says the venture is confident game studios would be willing to pay to license Artificial Agency's technology, but that once deployed, gamers could be charged a monthly fee.
“There's an inference cost to running these systems, so it's going to have to be a premium feature to some extent,” Mulet said. “As a gamer, would I pay $2.99 a month or would I pay $12.99? It's too early to tell.”