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I think this is a good idea. It's not like many AAA games are acclaimed for their dialogue, characters and writing, people literally joke about how crap their writing is. Let people have conversations with in-game characters, why not?
Open source communities have gone out of their way to set up general-purpose AIs to play Minecraft with you in the crudest ways imaginable and it kind of works. Microsoft literally owns Minecraft and they have a ludicrous amount of compute. They could make a minecraft-specific AI model, special servers where the player (players?) could be warlords with whole armies they direct and manage. The sky is the limit. This is a GAAS subscription goldmine just waiting to happen if they can cut down the inference costs, which they should definitely be able to do with a specialist model.
The real problem Microsoft has is dysfunctional culture. It's really not that hard to make Halo Infinite and have it be actually good. They have the money but not the necessary organizational skills. How hard can it be to make Windows 11 run smoothly enough for people to risk their computers and 'upgrade'? Windows 10 was OK...
It depends on implementation (as with everything...)
Consider: AI art. Surely I'm not the only one who thinks this and this look absolutely tasteless. If companies start replacing even background elements with slop, their games will look noticeably worse.
I'm ambivalent regarding coding agents. In my experience, they are very useful, but you still need real skill to avoid writing horrible code. They write code in one shot that "just works"...except there are small issues: outdated patterns, slow algorithms, unnecessary operations (e.g. copying), missed opportunities for abstraction, no high-level design. It really does just work, and quite often does not work for edge-cases. Except, my understanding is that most video game code is already like this, and AAA games regularly get flamed for buggy launches, so I have a hard time imagining worse. Hence I'm ambivalent.
A genuinely good use of AI would be for more human-like, or at least more fun, NPCs and enemies. AI-generated writing is like AI art, very bland, but if the NPCs are more dynamic that could be interesting. Perhaps the best use I can imagine is playing a single-player game and getting a multi-player experience, against players who are at my skill level and have good etiquette. But can LLMs do that?
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LLMs really are the best argument for GAAS I can think of. They would sway me, if done well, and I've literally never paid for a game that's on a subscription model.
There are significant costs involved in serving tokens, and the average consumer/gamer can't run very good models on local hardware (especially if they need to run a remotely demanding game at the same time).
The Chinese are already doing it, with positive sentiment. I predicted and continue to predict they'll become ubiquitous, and a genuine improvement.
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