ArenaX Labs co-founder Wei Xie, the force behind the AI battle training game AI Arena, believes that artificial intelligence could enable smaller game companies to compete with industry giants. However, he cautions that AI might also disrupt the gaming industry’s economic structure and could lead to the development of games with underlying issues that companies might struggle to fix.

“AI levels the playing field for smaller companies or groups, enabling them to challenge large enterprises with vast resources. This could spark a renaissance in indie gaming,” Xie told Web3 Gamer.

He predicts that smaller teams will soon be able to create impressive games more quickly and at a lower cost. This trend shows no sign of slowing down, Xie added. He argues that AI enhances the capabilities of game developers, allowing for the effortless creation of new characters and environments.

However, Xie warns that this ease of development might disrupt the gaming economy. Scarcity of resources, such as top-tier developers, typically maintains market equilibrium through healthy competition. Removing this friction could create economic imbalances.

If AI makes game development too easy, it might lead to an oversupply of games and reduce the need for developers. This is particularly challenging in Web3 gaming, where games have financial elements, potentially distorting the supply and demand balance.

Another concern is companies using off-the-shelf AI solutions without fully understanding them. This could lead to technical challenges or hidden issues that become apparent only after the game is live, making them difficult to address.

AI Arena, ArenaX’s player-versus-player fighting game, claims to be the first to integrate human and AI collaboration. Xie describes it as a mix between Super Smash Bros and Pokemon, where players train AI characters through imitation learning. The AI learns by observing and mimicking the human player’s actions.

The game, which launched on May 1, saw over 700,000 battles fought in nine days during an airdrop competition. AI Arena is designed for players with specific approaches to fighting games and showcases how AI might impact jobs in the coming decade.