What Does the Future of Gaming Look Like?

From virtual reality to artificial intelligence, these technologies are shaping the future of video games.

Written by Hal Koss
What Does the Future of Gaming Look Like?
Image: Shutterstock / Built In
UPDATED BY
Jessica Powers | Feb 14, 2023

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 gaming reached $184 billion in 2022, and the number of gamers is expected to grow to 3.6 billion by 2025. It’s not just kids either: 38 percent of gamers are between the ages of 18 and 34 years, and 16 percent are older than 55.

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?

Future of Video Games

  • Virtual reality
  • Augmented reality
  • Artificial intelligence
  • Cloud gaming
  • High-fidelity graphics
  • Free-to-Play
  • The metaverse

 

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.

Polygon’s Ben Kuchera put it bluntly in 2020: “VR has been five minutes away from some kind of breakthrough for about eight years.”

VR is still a niche category when compared to the rest of the gaming industry, with sales and manufacturing reflecting this: The global shipments for VR and AR equipment fell by 12 percent in 2022. 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 rumored to be developing a VR/AR system, although there have been delays and issues. This trend of investment is likely to continue with the VR game industry projected to grow at 30.5 percent by 2028

There are promising developments on the horizon for VR. But first, a few challenges need to be addressed. Namely, the bulky headsets and high prices. 

Most VR headsets weigh over a pound and must be strapped tightly to a user’s face. It’s not terribly comfortable. You get sweaty and after a half hour of play your energy is sapped.

“The whole world sort of got butt-hurt that their first-generation VR headset didn’t instantly morph into the Holodeck.”

This experience chafes against that mode of playing that is typical of gaming enthusiasts — spending hours comfortably sunk into a couch. If VR hardware can’t align with the preferences of gamers, will it be able to survive? Until companies slim down their VR headsets, get rid of cumbersome connector cables and lower prices, most gamers — save the early adopters and tech enthusiasts — will continue to balk.

Companies are 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.

Though he recognizes the limitations, Mack remains optimistic about VR’s future.

“VR, I think, will remain niche, but it could potentially turn into a big niche,” he said. “I think we’re going to see some very impressive stuff and very compelling stuff come down the pipe in the next couple of years.”

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 just doesn’t think it’s 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 Reading32 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 a big way 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 approximately $1 billion in sales every year since its release, was most people’s first brush with AR and remains one of the technology’s biggest success stories.

But the long-term success of Pokémon Go is due only in part to its beloved intellectual property. There are plenty of other games and books and movies in which people can spend time with Ash Ketchum and Pikachu. The real secret sauce is the game’s blend of virtual and real, the interplay between digital characters and physical locations.

“Instead of trying to simulate reality altogether, I think designers might find complementing reality a more trackable design challenge.”

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 try to capitalize on the consumer demand for games that blend the virtual with the real.

“I could totally see a game where you’re playing hide-and-seek or some kind of laser tag,” Mack said. “It’s a natural fit at that point.”

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, Snap 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. Although Snap’s Spectacles are not actually for sale, they are available to select creators looking to test them out. 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.  

Related ReadingEverything You Need to Know About Extended Reality

 

 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, gamemakers 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, could we expect to see more advanced AI appear in commercial games? It’s possible, according to experts, but not all are convinced it’s coming anytime soon.

“Games are a pretty conservative industry, in terms of the willingness that publishers or studios have to take risks.”

“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 other words, even if we could give NPCs minds of their own and let them run free in games, odds are that their autonomy would result in a less fun experience for the player. A rogue NPC could decide to shirk its duty to help the player advance toward the next level or take the player on a nonsensical quest where nothing happens.

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

“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, one that not even all human beings can perform well.”

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Generative AI in Gaming

AI isn’t just part of the gameplay experience though. It’s part of the game-making experience. 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 fairly standard practice in the industry. 

Procedural content generation is also used to create game levels — sometimes randomly — 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 gamemakers 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.

For example, 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.”

Until they figure that out, we’ll continue to see human designers and computer algorithms working together to create the next generation of video games. 

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Cloud Gaming

The future of gaming might take place on someone else’s computer. That is to say, in the cloud.

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 — which, up to this point, has only made movies and TV shows — has shown signs of getting into cloud gaming. The company hired its first vice president of gaming in 2021.

Microsoft reported that 20 million people have used Xbox cloud gaming services, a figure that’s double the amount of players previously reported. Nvidia’s cloud gaming service, GeForce NOW, has also seen significant growth in recent years. The platform grew from 14 million subscribers in 2021 to 20 million in 2022. 

Since it’s expected to be worth approximately $3 billion by 2024, 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.

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High-Fidelity Graphics

In the pursuit of ultra-realistic graphics, video games have come a long way.

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 only consumers are able to get their hands on it. A chip shortage has plagued the industry for the past few years, but executives from some of the top semiconductor companies believe that’ll change soon.

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 what you see happening in triple-A games (high-budget games made by big game publishers) which 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.

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.

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Free-to-Play Games 

Free-to-play games have exploded in popularity over the past several years. In fact, most gamers over the age of 35 prefer casual games and play on a smartphone. The free-to-play game market is expected to continue growing, with an estimated value of $83.6 billion in 2023.  

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 $5.1 billion in 2021 from in-game purchases alone.

 

The Metaverse

No discussion of the future of gaming would be complete without mentioning the metaverse, a theoretical concept that has dazzled many of the world’s foremost tech companies.

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 Fornite, where users can dress up as their favorite Star Wars or Marvel characters and watch virtual Ariana Grande concerts

The number of companies working to build the metaverse is growing, with about 500 organizations developing sectors geared toward the digital world, according to a report from market researcher Newzoo. 

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. It’s what Keith Stuart describes as a “digital third place,” more closely resembling a skate park than an arena.

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.

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