# Gaming Use Case

**The gaming industry is evolving into one of the biggest forms of entertainment in the modern world. The global video games market is worth $248.52 billion and is estimated to reach a market cap of $664.96 billion by 2033.¹**

The journey of video games is one of the most phenomenal for a technology product, starting with rudimentary hardware and pixelated graphics for a limited audience. Beginning with the first logical computer game in 1952 (OXO: tic-tac-toe), followed by PONG slot machines and the Atari 2600, the industry has evolved dramatically. Today’s video game titles cost hundreds of millions of dollars to develop, and gaming consoles like PlayStation and Xbox generate billions in revenue yearly, making the video game industry a technological behemoth.

The modern video game industry is characterized by a global audience, hyper-realistic gaming environments, augmented reality, celebrity voiceovers, large development teams, and massive marketing budgets. There are over 3.38 billion video game players. Local communities of popular titles organize annual championship events, drawing hundreds of thousands of offline participants and millions of online viewers. The global video game industry is projected to grow at a CAGR of 10.6% from 2024 to 2033, reaching a market cap of $664.96 billion.

Players expect more from every new generation of leading gaming titles, putting more pressure on gaming studios to compete. The development budget of AAA games easily surpasses $200 million, with popular titles like Call of Duty and Grand Theft Auto VI expected to cost over $250 million. Despite having massive in-house teams, gaming studios outsource a sizable portion of their development to third parties, indicating a robust need to embrace new development technologies and invest more in R\&D to achieve higher cost efficiencies.²

For the first time ever, indie games are generating as much revenue as AAA and AA titles on Steam. Games such as Black Myth: Wukong,  Palworld,  and Helldivers 2 have set new records, with tens of millions of units sold. This opens up a unique opportunity to serve not only big studios but indie developers as well.

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### AI Industry

Artificial intelligence allows gaming studios to leapfrog user expectations across their games, including creating life-like player characters and non-player characters (NPCs), adapting natural emotions, and the conversational capabilities of NPCs. As many as 49% of game developers employ generative artificial intelligence in their workspaces, with one-third of the developers using these technologies personally. Generative AI is one of the fastest-growing industries in terms of market size, economic impact, and net fundraising for new projects.

The global generative AI market size in the gaming industry is estimated to be worth over $11.10 billion by 2033, growing at a CAGR of 25.6% between 2024 and 2033.³ In terms of the game development process, generative AI will impact two primary segments: procedural content generation and non-player characters (NPCs). Several companies already employ generative AI for procedural content generation, but experts estimate that AI can bring a generational change when it comes to NPCs. Generative AI can help create more life-like attributes, facial gestures, and voice modulations to boost the overall interactiveness of games.



1 [Video Games Market Size To Attain USD 664.96 Billion By 2033](https://www.precedenceresearch.com/video-game-market)

2 [Anticipated Acquisition by Microsoft of Activision Blizzard, Inc.](https://assets.publishing.service.gov.uk/media/644939aa529eda000c3b0525/Microsoft_Activision_Final_Report_.pdf)

3 [Q1 Cloud Spending Grows by Over $10 Billion from 2022; the Big Three Account for 65% of the Tota](https://www.srgresearch.com/articles/q1-cloud-spending-grows-by-over-10-billion-from-2022-the-big-three-account-for-65-of-the-total)l
