Jam & Tea Studios is the latest gaming startup implementing generative AI to transform the way players interact with non-playable characters (NPCs) in video games.
Traditionally, NPCs in video games operate according to pre-determined scripts that can make them feel repetitive, unrealistic and boring, and can limit the possibilities of what a player can experience. However, with generative AI, players can have casual conversations and interact with NPCs however they want (within reason).
Founded by gaming industry veterans from Riot Games, Wizards of the Coast and Magic: The Gathering, the company announced on Friday its first game that utilizes generative AI tools to assist with gameplay mechanics, content generation, dialogue and item generation.
Jam & Tea's debut title, Retail Mage, is a role-playing game in which players take on the role of a wizard working as a salesperson in a magical furniture store. The main objective of the game is to help customers and earn five-star reviews, but it's up to the player to actually do the job or cause chaos. AI NPCs become customers, and the human player can say and do almost anything they want, allowing for a wide variety of possible outcomes.
In Retail Mage, players are approached by customers, each with a unique request. Rather than choosing from pre-set phrases, players can input how they want to respond into a text generator. Players can ask the AI to “say something engaging,” and the AI will offer up four different conversation options:
Image credit: Jam & Tea
Jam & Tea is one of several companies competing in the AI-powered NPC space, alongside Artificial Agency, Inworld and Nvidia. Ubisoft's AI-powered “ghostwriter” tool writes dialogue for NPCs in some of its games.
The new game also comes at a time when creators are concerned about potential challenges posed by the widespread adoption of generative AI. Last month, SAG-AFTRA, a union made up of voice actors and other talent, launched a strike against major game publishers over concerns about AI.
But Jam & Tea claims to take a balanced approach to the adoption of AI, and wants to protect the artists, writers and other creatives involved in game design.
“Our philosophy is that creativity will become increasingly important as we leverage this technology to provide new experiences for players,” co-founder and chief creative officer M. Yichao, a former narrative designer who has worked on Guild Wars 2, League of Legends, and other games, told TechCrunch.
“AI can generate all these conversations and have endless conversations with characters, but to really give it meaning and make it into a meaningful experience with impact, depth and emotion that carries through the story, it takes a creative eye and lens. That's going to be more important than ever,” Yichao added.
He explained that creative staff are heavily involved throughout the development process, which includes creating NPCs, establishing their motivations, interests and backgrounds, as well as providing sample dialogue to help the AI mimic the tone and generate dialogue in real time.
The Limitations of AI NPCs
Despite its advantages, generative AI for NPCs does have its limitations. One major concern is the unpredictability of the AI, which can lead to extremely erratic NPC behavior and frustrating players. The AI can also give hallucinated answers, which can lead to NPCs saying the wrong thing or saying things that don't exist in the world.
Yichao believes that continually improving the AI engine will help mitigate unpredictable NPCs. Players can also rate the characters' reactions, and that data will help improve the characters' behavior. Additionally, Jam & Tea claims to have guardrails in place to prevent inappropriate conversations.
Players are encouraged to be creative, resulting in original, spontaneous interactions: for example, instead of helping a customer, players can choose to take part in activities such as hide-and-seek, a scenario that actually occurred during playtesting.
“One night, our lead engineer was playtesting and went up to an NPC and said, 'I'm bored,' and the NPC replied, 'Okay, let's play a game. Let's play hide-and-seek.' And the other NPCs said, 'Yeah, we can play,'” says co-founder and CTO Aaron Farr. The NPCs followed the rules of the game, with one hide-and-seek player roaming the store looking for everyone hiding.
“None of it was programmed, it was all emergent behavior. That's part of the joy of being able to pair the experience with what the player wants to do and then modify that experience in real time,” added Farr, a former engineering lead at Riot Games and Singularity 6.
Throughout the testing phase, the company has tried out a variety of large-scale language models (LLMs), including those from OpenAI, Google's Gemma, Mistral AI and Meta's Llama, and other open models. At this point, it's unclear which LLM will ultimately be used in the final version of the game, but the company is tweaking it to train the model how to provide better, more “character-like” responses.
Create an item from scratch
Jam & Tea's AI engine goes beyond dialogue generation. Players can interact with any object in the game and communicate their intent to pick it up, break it down into parts, or even create items from scratch. Depending on what the player wants to do, the game will interpret their intent and determine whether they will succeed or not.
In the demo shared with TechCrunch, Yichao interacts with an NPC named Noreen and asks for a stuffed animal in the shape of an antelope. Yichao then enters a command into an action box, retrieving a pillow resembling an antelope from a wooden box. The game recognizes Yichao's action as successful and adds the item to Yichao's inventory.
Because this item has never existed in the game before, the player never sees the antelope-shaped stuffed animal physically appear. All that happens in the game is that the item appears in the player's inventory as a default image of a pillow. If the player wishes to perform an action, such as sitting on the chair, a notification will appear on-screen indicating that the action has been performed.
“One of the really great things about this technology is that it allows for limitless creative expression. For example, what if you could take a piece of meat and put it in a bowl to make a delicious fish stew? Maybe the fish stew is inedible. [image]”But one of the things I'm working on with my artists is coming up with the creative ability to represent that item in the world in a satisfying way, and then allow the player's imagination to fill in the blanks, giving the player the maximum creative freedom to make something unexpected,” Yichao said.
No AI technology is used to generate 2D or 3D assets – real artists create the images.
Image credit: Jam & Tea
Retail Mage is a relatively basic game compared to the others, and the company promises that at launch it will have a more advanced product than the test version we saw in the demo.
Jam & Tea says the game is primarily intended to demonstrate applications of the technology as it continues to experiment. Beyond Retail Mage, the company also has another game in development, currently referred to internally as “Project Emily,” which will signal broader ambitions, featuring more environments and a refined storyline.
The startup's eight-person team has a lot of challenges ahead of it to reach the level of major gaming companies, but by acting while momentum is strong, it can adapt and grow as AI models advance.
Jam & Tea has raised $3.15 million in seed funding from London Venture Partners, with participation from Sisu Game Ventures and 1Up Ventures, and plans to raise additional capital later this year.
As for the business model, Jam & Tea plans to charge $15 to purchase the game and offer additional game packs that players can purchase separately. It will initially be released on PC, but the company aims to achieve cross-platform functionality within the next few years.
Retail Mage is expected to be available to the public later this fall.