What Does the Future of Gaming Look Like?

Video games have steadily risen in popularity for years. And with the social benefits of video games becoming more apparent, the trend has only accelerated. Gaming is now a bigger industry than movies and sports combined.

Revenue for the global gaming industry reached $183.9 million in 2023, with the number of global gamers surpassing 3.3 billion. It’s not just kids either — the age of the average gamer has jumped from 29 in 2004 to 36 in 2024.

So what’s next? Culturally, gaming will only continue to become more mainstream. But what tech innovations are shaping the future of video games, and how will they influence the gaming experience?

Virtual Reality

For decades, virtual reality (VR) — three-dimensional simulations players access via headsets — has tantalized gamers with the prospect of a fully immersive experience. But the technology has been slow to deliver on that promise — although projections still have the VR and AR market reaching $370 billion by 2034, the market still only sits at $11.5 billion in 2024. And despite its buzzy status, it continues to give many consumers pause. 

“Right now we’re sort of in this trough of disillusionment about VR,” Kevin Mack, a VR game developer, told Built In in 2020. “There was a lot of hype around it in 2015 and 2016, and then the whole world sort of got butt-hurt that their first-generation VR headset didn’t instantly morph into the Holodeck.”

Although VR has hit a few bumps along the way, tech and gaming companies are busy trying to advance the industry, investing considerable resources to develop VR hardware and games. Companies like Meta, Valve, PlayStation and Samsung have all ventured into the VR industry over the last several years. Apple is even jumping in on the action with the release of its Vision Pro headset. This trend of investment is likely to continue with the VR game industry projected to grow at 30.5 percent by 2028.

While VR headsets have developed a reputation for being pricy, bulky and uncomfortable for gaming, companies have been busy making VR more appealing to a wider audience, and hardware prices are dropping. But even when those hurdles are cleared, the fact that the typical VR experience is so socially isolating might limit its upside.

“[VR] is a solitary experience. It’s a thing that you’re doing on your own and it’s a thing that you choose to do to the exclusion of anything else,” Mack said. He enjoys playing VR games, but if someone else is around, he thinks twice before strapping the headset on.

However, this may not always be the case. Mitu Khandaker, a professor at New York University’s Game Center, is hopeful about VR’s role in gaming, she said in a 2020 interview with Built In. Khandaker doesn’t think it’s just going to look like people alone in their homes playing through a headset, so much as a co-located experience that multiple people share in.

“I think that the future of VR is more through social VR,” she said.

Indeed, several VR games — such as Rec Room and VRChat — offer social experiences where users can interact and hang out with each other in real time. If VR unlocks more connections with other people, it will be able to earn a prominent place in the future of gaming.

Related Reading23 Virtual Reality Companies to Know

Augmented Reality

Augmented reality (AR) — a kind of gaming technology that superimposes digital images onto the physical world, typically through smartphones or special glasses — broke out onto the gaming scene in 2016.

That’s when parks and plazas swarmed with smartphone-wielders playing Pokémon Go, an AR mobile game in which digital objects — in this case, colorful critters called Pokémon — overlay a person’s natural field of view. The game, which has generated over $8 billion in player spending since its release, was most people’s first brush with AR and remains one of the technology’s biggest success stories.

The game’s secret sauce is its blend of virtual and real, the interplay between digital characters and physical locations. That’s partly why AR took off faster than VR: People have an appetite for games that interact with reality, not remove them from it.

“I think the entertainment experiences in AR aren’t going to try to be immersive experiences,” Mack said. “When I was playing [Pokémon Go], I would go to specific places just because there was a Pokémon there. And that’s a powerful social driver.”

Further out into the neighborhood — rather than deeper inside goggles — was the x-factor that led to the network effect that propelled Pokémon Go into a multi-billion-dollar phenomenon. Its success will no doubt inspire more game studios to capitalize on the consumer demand for games that blend the virtual with the real.

Rogelio Cardona-Rivera, a professor at the University of Utah’s School of Computing, likewise predicts that, in the short term at least, AR will prove to be more fertile ground for game designers than VR.

“Instead of trying to simulate reality altogether, I think designers might find complementing reality a more trackable design challenge,” he told Built In in 2020. “And then we might see some of the lessons from AR folded back into VR.”

AR gaming is most recognizable on mobile phones, but tech companies like Meta and Magic Leap are expanding into AR glasses. Magic Leap’s lightweight, glasses-style headset is specifically made for enterprise applications like healthcare, design and manufacturing. With Meta expected to release its own AR glasses in 2024, there are sure to be new innovations for gamers interested in AR in the coming years.  

Artificial Intelligence

Artificial intelligence has been used in gaming for decades — most prominently in non-player characters, or NPCs, like the colorful ghosts in Pac-Man or the innocent bystanders in Grand Theft Auto. 

AI in Non-Player Characters

In recent years, game makers have taken a more sophisticated approach to NPCs. Many NPCs are now programmed with behavior trees, which allow them to perform more complex decision-making. The enemy aliens in Halo 2, for example, have the ability to work together and coordinate their attacks, rather than heedlessly beeline into gunfire one by one like they’re in a cheesy action movie.

 Still, NPCs can only do what is written in their code. Their behavior, however intelligent it seems, is still determined in advance by the game’s designers. In the future, we could see more advanced AI appear in commercial games, but not all are convinced it’s coming anytime soon.

“You can try and build a really cool, comprehensive AI system which is about letting a character behave in all kinds of ways the designer hasn’t anticipated,” Khandaker said. “But if there’s too much of that, there’s no guarantee about which way the story will go and whether it’s going to be any fun.”

In addition to presenting game design challenges, free-range NPCs may be a non-starter when considered from a purely economic perspective.

“Games are a pretty conservative industry, in terms of the willingness that publishers or studios have to take risks,” Khandaker said. “Because there is such a great history in terms of design for what does work in games, there’s a real sense of wanting to keep doing that same thing.”

Putting more sophisticated NPCs in games may be possible. But if it costs a lot of money and fails to improve the player’s experience, studios lose an incentive to make it happen. Still, some designers persist in NPC enhancements, especially in figuring out ways to make NPCs more believable and human-like.

“The biggest challenge for AI is to mimic what is perhaps the most complex and mysterious capacity of the human brain: imagination,” Julien Desaulniers, the programming team lead of AI and gameplay on Assassin’s Creed Valhalla, told GamesRadar. “Having AI generate narrative content is taking this to a whole new level.” 

Generative AI in Gaming

For several years now, designers have been using AI to help them generate game assets, which frees them up from painstakingly drawing each individual tree in a forest or rock formation in a canyon. Instead, designers can offload that work to computers by using a technique called procedural content generation, which has become standard practice in the industry. 

Procedural content generation is also used to create game levels, so the player can enjoy a fresh experience each time. The 2016 game No Man’s Sky took this technique to the extreme, as the entire open-world environment of the game is procedurally generated and was not sketched out ahead of time by the game’s creators.

Some game makers also rely on neural networks to tailor-make game levels for players through a process NYU professor Julian Togelius calls experience-driven procedural content generation.

In 2009, researchers collected player data for Super Mario, quantifying each player’s preferences as they played. Maybe a level had too many jumps and not enough sewers, or coins were hard to reach and bad guys were too easy to defeat. Researchers fed player data to a computer. Once the computer digested the information, it spat out new levels that reflected the player’s preferences. 

AI in the Future of Gaming

While AI generates game assets and, in some cases, entire levels, the livelihoods of human designers aren’t in jeopardy — at least not yet.

“For the foreseeable future, we will not have AI systems that can design a complete game from scratch with anything like the quality, or at least consistency of quality, that a team of human game developers can,” Togelius wrote in his 2018 book Playing Smart.

While AI may not create entire games yet, AI-generated art may change the graphics industry in the future. One designer even used AI art to create a horizontal-scrolling shooter game in just three days. 

Playing with AI art might be fun for creators, but academics and game designers alike are still trying to implement AI systems that will control the game in a way that is engaging for the player. Cardona-Rivera envisions a future in which AI acts as a game master that calls the shots for a human player.

“Imagine what it would mean to have an AI ‘director’ who’s looking at what you’re doing and directing the unfolding experience for you,” he said. “That’s kind of like what my research is trying to do and what a lot of interesting work in the field — not just me — is trying to do.” 

More on AIThe Future of AI: How Artificial Intelligence Will Change the World

Cloud Gaming

Cloud gaming, sometimes called game streaming, is a kind of online gaming that allows players the ability to stream games directly on their device by accessing video games from faraway servers, in the same way they stream Netflix movies on their smart TVs without needing to pop in a DVD first.

In theory, this arrangement makes the gamer’s local hardware less relevant — they can stream the games regardless of their device. And since cloud gaming is typically pitched as a subscription service, it’s moving gamers away from a mentality of owning physical media and toward one of renting digital content.

In the past few years, Sony and Microsoft, which have long been the console gaming incumbents, have rolled out their own cloud gaming services. Gaming chipmaker Nvidia has too. Even Big Tech is getting in on the action. Amazon debuted its cloud gaming offering — called Luna — in 2020. Even Netflix has started getting into cloud gaming.

Since it’s expected to surpass $143 billion by 2032, global cloud gaming is likely here to stay. Gamers without a strong WiFi connection might have laggy cloud gaming experiences, but with the growing number of people who have internet access, that’s likely to change.

High-Fidelity Graphics

PC gaming companies like Nvidia and AMD have made great strides in creating graphics cards that allow for high-fidelity images in games and techniques like ray tracing. High-fidelity graphics are when a game has 3D imagery with a multitude of complex vertices, the points in space where line segments of a shape meet. High-fidelity games usually have ray tracing technology too. 

In the past, things like shadows and reflections and lens flares were essentially painted onto objects within the game. This gave the illusion that light was coming from the sun or moon and reacting as it would when it hit a surface. With ray tracing, an algorithm actually simulates the behavior of light on objects within a game. 

The technology is expected to be a game changer — if consumers are able to get their hands on it. A chip shortage has plagued the industry for the past few years, but there are signs that the shortage is receding. 

Not all games of the future will be designed for such realistic graphics. Especially not indie games. The way Mack sees it, there are two distinct routes game developers can take when it comes to graphics.

One approach is to hire tons of visual artists and technicians to supply vast amounts of art for high-fidelity graphics. That means big budgets, big teams and increasingly realistic graphics, down to every last speck of dirt. This approach is more often used in triple-A games (high-budget games made by big game publishers).  

The other approach is to produce a more stylized — in some cases cartoonish — aesthetic for your game. That way, the costs stay down but the game still looks cool and dodges the criticism: “It doesn’t look realistic!” Mack said this approach is becoming more and more common in the mobile VR space.

ReadTriple-A Game Publishers Are Finally Taking Accessibility Seriously

Free-to-Play Games 

Free-to-play games have exploded in popularity over the past several years, and the free-to-play game market is expected to maintain a value of over $83.2 billion in 2024.

Many free-to-play games make money from ads, but some games, like Overwatch and Apex Legends, are free to play but have in-game purchases — like battle passes and skins — that drive revenue.

Several gaming companies are seeing the benefits of offering free-to-play games with in-game purchases. Activision Blizzard, the company behind Overwatch, World of Warcraft and Call of Duty, reported that it made $2.46 billion from in-game purchases within a single quarter in 2023. 

The Metaverse

A concept popularized by author Neal Stephenson in his 1992 science-fiction book Snow Crash, the metaverse is best understood as an online cyberspace, a parallel virtual realm where everyone can log in and live out their (second) lives. Ideally, the metaverse will combine both virtual and augmented reality, have its own functioning economy and allow complete interoperability.

While we may be a long way off from that, hints of the metaverse are increasingly evident. You see it in gaming platforms like Roblox, where luxury fashion brands like Gucci host events, and in games like Fortnite, where users can dress up as their favorite Star Wars or Marvel characters and watch virtual music concerts.

The number of companies working to build the metaverse is growing, and it’s only a matter of time before the metaverse, like the internet, will be used for more than just gaming. It may incorporate office work as well. 

But the definition of gaming is expanding. It’s no longer about competition, but connection. If the current trends and future forecasts of the gaming industry clue us into anything about ourselves, it’s that our desire to connect far outpaces our desire to escape.

Frequently Asked Questions