Can AI Make Video Games More Immersive? Some Studios Turn to AI-Fueled NPCs for More Interaction

The AI (Artificial Intelligence) letters and robot hand are placed on computer motherboard in this illustration taken, June 23, 2023. (Reuters)
The AI (Artificial Intelligence) letters and robot hand are placed on computer motherboard in this illustration taken, June 23, 2023. (Reuters)
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Can AI Make Video Games More Immersive? Some Studios Turn to AI-Fueled NPCs for More Interaction

The AI (Artificial Intelligence) letters and robot hand are placed on computer motherboard in this illustration taken, June 23, 2023. (Reuters)
The AI (Artificial Intelligence) letters and robot hand are placed on computer motherboard in this illustration taken, June 23, 2023. (Reuters)

For decades, video games have relied on scripted, stilted interactions with non-player characters to help shepherd gamers in their journeys. But as artificial intelligence technology improves, game studios are experimenting with generative AI to help build environments, assist game writers in crafting NPC dialogue and lend video games the improvisational spontaneity once reserved for table-top role-playing games.

In the multiplayer game “Retail Mage,” players help run a magical furniture store and assist customers in hopes of earning a five-star review. As a salesperson — and wizard — they can pick up and examine items or tell the system what they'd like to do with a product, such as deconstruct chairs for parts or tear a page from a book to write a note to a shopper.

A player’s interactions with the shop and NPCs around them — from gameplay mechanics to content and dialogue creation — are fueled by AI rather than a predetermined script to create more options for chatting and using objects in the shop.

“We believe generative AI can unlock a new kind of gameplay where the world is more responsive and more able to meet players at their creativity and the things that they come up with and the stories they want to tell inside a fantasy setting that we create for them,” said Michael Yichao, cofounder of Jam & Tea Studios, which created “Retail Mage.”

The typical NPC experience often leaves something to be desired. Pre-scripted interactions with someone meant to pass along a quest typically come with a handful of chatting options that lead to the same conclusion: players get the information they need and continue on. Game developers and AI companies say that by using generative AI tech, they aim to create a richer experience that allows for more nuanced relationships with the people and worlds that designers build.

Generative AI could also provide more opportunities for players to go off-script and create their own stories if designers can craft environments that feel more alive and can react to players' choices in real-time.

Tech companies continue to develop AI for games, even as developers debate how, and whether, they’ll use AI in their products. Nvidia created its ACE technologies to bring so-called “digital humans” to life with generative AI. Inworld AI provides developers with a platform for generative NPC behavior and dialogue. Gaming company Ubisoft said last year that it uses Ghostwriter, an in-house AI tool, to help write some NPC dialogue without replacing the video game writer.

A report released by the Game Developers Conference in January found that nearly half of developers surveyed said generative AI tools are currently being used in their workplace, with 31% saying they personally use those tools. Developers at indie studios were most likely to use generative AI, with 37% reporting using the tech.

Still, roughly four out of five developers said they worry about the ethical use of AI. Carl Kwoh, Jam & Tea's CEO, said AI should be used responsibly alongside creators to elevate stories — not to replace them.

“That’s always been the goal: How can we use this tool to create an experience that makes players more connected to each other?” said Kwoh, who is also one of the company’s founders. “They can tell stories that they couldn’t tell before.”

Using AI to provide NPCs with endless things to say is “definitely a perk,” Yichao said, but "content without meaning is just endless noise." That's why Jam & Tea uses AI — through Google's Gemma 2 and their own servers in Amazon — to give NPCs the ability to do more than respond, he said. They can look for objects as they’re shopping or respond to other NPCs to add “more life and reactivity than a typically scripted encounter.”

“I’ve watched players turn our shopping experience into a bit of a dating sim as they flirt with customers and then NPCs come up with very realistic responses,” he said. “It’s been really fun to see the game react dynamically to what players bring to the table.”

Demonstrating a conversation with an NPC in the game “Mecha BREAK,” in which players battle war machines, Ike Nnole said that Nvidia has made its AI “humans” respond faster than they previously could by using small language models. Using Nvidia's AI, players can interact with the mechanic, Martel, by asking her to do things like customize the color of a mech machine.

“Typically, a gamer would go through menus to do all this,” Nnole, a senior product marketing manager at Nvidia said. “Now it could be a much more interactive, much quicker experience.”

Artificial Agency, a Canadian AI company, built an engine that allows developers to bring AI into any part of their game — not only NPCs, but also companions and “overseer agents” that can steer a player towards content they’re missing. The AI can also create tutorials to teach players a skill that they are missing so they can have more fun in-game, the company said.

“One way we like to put it is putting a game designer on the shoulder of everyone as they’re playing the game,” said Alex Kearney, cofounder of Artificial Agency. The company’s AI engine can be integrated at any stage of the game development cycle, she said.

Brian Tanner, Artificial Agency's CEO, said scripting every possible outcome of a game can be tedious and difficult to test. Their system allows designers to act more like directors, he said, by telling characters more about their motivation and background.

"These characters can improvise on the spot depending on what’s actually happening in the game,” Tanner said.

It's easy to run into a game's guardrails, Tanner said, where NPCs keep repeating the same phrase regardless of how players interact with them. But as AI continues to evolve, that will change, he added.

“It is truly going to feel like the world’s alive and like everything really reacts to exactly what’s happening," he said. “That’s going to add tremendous realism.”



UK Regulator Considers Opening Apple, Google App Stores to Rival Payments

FILE PHOTO: A Google logo is seen at a company research facility in Mountain View, California, US, May 13, 2025. REUTERS/Carlos Barria/File Photo
FILE PHOTO: A Google logo is seen at a company research facility in Mountain View, California, US, May 13, 2025. REUTERS/Carlos Barria/File Photo
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UK Regulator Considers Opening Apple, Google App Stores to Rival Payments

FILE PHOTO: A Google logo is seen at a company research facility in Mountain View, California, US, May 13, 2025. REUTERS/Carlos Barria/File Photo
FILE PHOTO: A Google logo is seen at a company research facility in Mountain View, California, US, May 13, 2025. REUTERS/Carlos Barria/File Photo

Britain's competition regulator on Tuesday proposed allowing app developers to steer users to alternative payment options outside Apple and Alphabet's Google app stores to cut fees and boost competition.

The Competition and Markets Authority said the proposals would remove restrictions that currently prevent UK developers from directing users to off-platform payment options, which are banned by Apple and restricted by Google.

The watchdog said any fees charged by two of the world's largest technology companies for allowing such "steering" would need to be fair and reasonable, and should be lower than current app store commissions, with savings passed on to consumers or reinvested in innovation.

"While it is only fair for Apple and Google ⁠to be compensated for ⁠the services they provide, any fees they charge must be justified through a robust, evidence-led framework involving due reference to both cost and value," Will Hayter, executive director for digital markets, is expected to say later on Tuesday, according to an excerpt of his speech.

The CMA said it was also considering requiring Apple to open up access to its near-field communication technology, which is used for contactless payments, potentially allowing developers to offer payment services within their own iOS ⁠apps.

This could enable UK fintech companies to build alternatives to Apple's wallet, including account-to-account payments and emerging technologies such as digital currencies, Reuters quoted the CMA as saying.

The proposals are part of a consultation under Britain's new digital markets regime, which gives the watchdog powers to impose tailored requirements on companies with so-called "strategic market status.”

Google said in an emailed statement it had already taken steps in that direction, pointing to new Play Store terms introduced earlier this month allowing developers to steer users to complete transactions outside the platform.

The CMA said it would assess Google's recent changes as part of its work before deciding later this year whether to impose formal requirements.

Apple has previously said it does not support allowing developers to direct users to off-platform payments, arguing this could undermine user ⁠security and fraud protections ⁠and limit its ability to verify transactions.

An Apple spokesperson said it could open the door to "scams, bait-and-switch tactics, and the circumvention of parental controls.”

"When users are directed away from Apple's trusted payment infrastructure, they lose the protections they rely on Apple to provide," the spokesperson said, adding the US tech giant would continue to "make our concerns clear" to the CMA.

The regulator designated Apple and Google as having strategic market status in mobile ecosystems last year, giving it the power to intervene more directly to boost competition.

In February, it secured commitments from the two companies to make their app stores fairer and more transparent, including changes to rankings, reviews and access to certain features – but they did not address commissions, which can reach up to 30%.

The CMA said at the time that enabling developers to steer users to alternative payment methods remained a priority, an issue that has also drawn scrutiny from regulators in the European Union, the United States and Japan.


Taiwan Raids Tech Firms in China AI Chip Smuggling Probe

This handout photo from the Taiwan Coast Guard taken on May 20, 2026 and released on May 21 shows pallets of servers made by Super Micro Computer seized by Taiwanese authorities at an undisclosed location. (Photo by Handout / TAIWAN COAST GUARD / AFP)
This handout photo from the Taiwan Coast Guard taken on May 20, 2026 and released on May 21 shows pallets of servers made by Super Micro Computer seized by Taiwanese authorities at an undisclosed location. (Photo by Handout / TAIWAN COAST GUARD / AFP)
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Taiwan Raids Tech Firms in China AI Chip Smuggling Probe

This handout photo from the Taiwan Coast Guard taken on May 20, 2026 and released on May 21 shows pallets of servers made by Super Micro Computer seized by Taiwanese authorities at an undisclosed location. (Photo by Handout / TAIWAN COAST GUARD / AFP)
This handout photo from the Taiwan Coast Guard taken on May 20, 2026 and released on May 21 shows pallets of servers made by Super Micro Computer seized by Taiwanese authorities at an undisclosed location. (Photo by Handout / TAIWAN COAST GUARD / AFP)

Taiwanese investigators have raided the Taiwan offices of US company Super Micro Computer and two other tech firms, a prosecutor said Tuesday, as part of an expanded probe into the alleged smuggling of Nvidia AI chips to China.

Prosecutors said in May they were investigating the shipment of "high-end" AI servers containing advanced Nvidia chips to China, Macau and Hong Kong, in violation of US export controls.

Nine people are now under investigation, up from three previously, Huang Sheng, head prosecutor in the Keelung Prosecutors Office, told AFP.

They are accused of forging documents so they could ship roughly 50 servers made by Super Micro Computer to China.

Some of the servers were cleared by Taiwan customs and sent to China via Japan, an official previously told AFP on the condition of anonymity.

Twelve sites were raided on Monday as part of the probe, the prosecutors office said in a statement.

They included the homes of six people and offices of the companies they worked for -- Nasdaq-listed Super Micro Computer and Taiwan-listed firms Albatron Technology and Chief Telecom.

The United States restricts the export of its most cutting-edge AI chips to China, partly over concerns the technology could be used by Beijing's military.

But it is not a criminal offence in Taiwan -- a situation lawmakers and experts say needs to change -- with Taiwanese prosecutors relying on other laws to go after offenders.

Lawmaker Chung Chia-pin, who belongs to President Lai Ching-te's Democratic Progressive Party (DPP), plans to propose an amendment to the Foreign Trade Act to include a "mainland China semiconductor chip clause" that would make exporting chips there illegal.

Chung told AFP Tuesday that a loophole in the law was created under former president Ma Ying-jeou, who belongs to the Kuomintang party, and successive DPP-led governments have failed to close it.

Top-end chips made by US titan Nvidia -- the world's most valuable company -- are used to train and run AI systems.

In response to Washington's export restrictions, China has been accelerating efforts to develop its own AI chips and break away from reliance on US hardware.

This month, Taiwanese Deputy Economic Affairs Minister Ho Chin-tsang said Taiwan and the United States "will work to implement our shared export control goals", but the government has not provided details.

Chris McGuire, an expert on China and AI at the US-based Council on Foreign Relations, said chip smuggling was a "really significant problem" in Taiwan and Southeast Asia.

"It's really, really important that allies align with the United States on all of these policies and also legal authorities," McGuire, who worked at the National Security Council under former US president Joe Biden, told a forum in Taipei this month.

"It's not a criminal violation in Taiwan to export AI chips to China, obviously it is under US law, but it's not under Taiwanese law. That needs to change, right?"

Super Micro Computer, Albatron Technology and Chief Telecom have said separately they are cooperating with investigators. Their shares have seen sharp falls this week.

Prosecutors say it is too early to know if the case is linked to a Nvidia chip smuggling case involving Super Micro Computer employees in the United States.

A US indictment unsealed in March showed employees of the company allegedly raked in billions of dollars diverting Nvidia AI chips to China in breach of export controls.


WhatsApp Will Allow Users to Go by Usernames Instead of Phone Numbers, Closing a Privacy Blind Spot

A WhatsApp icon is displayed on an iPhone, Nov. 15, 2018, in Gelsenkirchen, Germany. (AP)
A WhatsApp icon is displayed on an iPhone, Nov. 15, 2018, in Gelsenkirchen, Germany. (AP)
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WhatsApp Will Allow Users to Go by Usernames Instead of Phone Numbers, Closing a Privacy Blind Spot

A WhatsApp icon is displayed on an iPhone, Nov. 15, 2018, in Gelsenkirchen, Germany. (AP)
A WhatsApp icon is displayed on an iPhone, Nov. 15, 2018, in Gelsenkirchen, Germany. (AP)

WhatsApp users will soon get the option of going by usernames instead of phone numbers, the company said Monday, announcing plans to address a privacy blind spot.

The app said it has started allowing users to reserve unique usernames, which can be used to contact WhatsApp users when the feature is launched later this year.

WhatsApp, which says it has more than 3 billion users globally, has until now allowed users to be contacted by anyone who has their phone number.

The app, owned by Meta Platforms, said in a blog post that over the “coming months” users will get the option to be found and contacted only by their username, and not their number. It wasn't more specific about the timeline.

“We have designed this as a core privacy feature,” Alice Newton-Rex, WhatsApp's vice president of product, told reporters.

There won't be a directory of usernames on the app, and the app won't suggest names as you type.

“People will need to know your exact username to contact you for the first time,” she said.

WhatsApp's current privacy settings are limited to blocking individual users and silencing unknown callers. The app also allows users to add a profile name, but that's only displayed in chat groups for other people who don't have the user's contact info saved.

While Americans still prefer text messaging to WhatsApp, the app is widely used in Europe, Asia and much of the rest of the world.

Catchy online handles are highly coveted and users will likely scramble to claim a desirable one.

“I think a lot of people will go and get usernames and that’s why we decided to open reservations early,” Newton-Rex said.

Companies, organizations and creators with existing accounts on Meta's social media platforms, Instagram and Facebook, will get the chance to claim their usernames on WhatsApp.

Usernames need to be between three and 35 characters. To prevent impersonation, WhatsApp will hold back usernames for high-profile people or groups such as celebrities, public figures and government entities.