Palworld AI Controversy is Just the Surface, AI Use is Already Huge in Gaming

We independently assess all our recommendations. Purchases through our links may earn us a commission.

2024 had a great start in gaming and one of the games that made it a memorable year for gamers this early is the Pokemon-esque survival game, Palworld. Peaking at a jaw-dropping two million concurrent players on Steam, Palworld is wildly popular, to say the least. But behind prominence is a plague of controversies, not the least of which is its alleged use of AI art.

While AI (artificial intelligence) has already been a hot topic since the start of the decade, Palworld has yet again reignited the discussion, especially since it also spotlighted the use of AI in video games. However, Palworld is just the tip of the iceberg here, as AI has already embedded itself in the core of the gaming industry for better or worse.

How Palworld Tore the Internet Apart

Initially, Palworld came to be seen as an answer to how Nintendo kept taking their Pokemon fanbase for granted. It thus became widely celebrated as a result, with sentiments about how fun Pokemon could have been if it adapted to contemporary trends, and how Palworld understood that notion and grabbed it first.

But some Pokemon fans were quick to point out just how similar Palworld’s creature designs were to the former. Some Palworld Pals (the name they call their version of Pokemon) even look interchangeable with Nintendo’s creations. 

Eventually, out came the AI art speculations, and accusations were thrown left and right about how Palworld’s developers used AI art/image generators to copy some of Pokemon’s designs. The problem was, that there was no solid evidence backing the accusations beyond the “this Pal looks suspiciously like Meowth, or Eevee,” discourses.

The closest thing to “evidence” the accusers could muster was how Palworld’s studio’s CEO praised AI and used some of it for their past games. 

Still, the controversy was so loud, that the CEO, Takuro Mizobe had to chime in and respond to the allegations, citing their inexperienced artists and developers, and calling fans to stop attacking artists.

Despite the issue, Palworld remained popular and whatever it was being accused of didn’t affect the game’s sales or player count regardless of whether the AI plagiarization concerns had validity or not.

It did, however, produce a different effect that shook the ethical foundations of game development and shed more light on AI’s role in gaming.

AI Use in Gaming Goes Deeper than Derived Assets

Palworld’s AI controversy is merely part of a bigger picture that paints the future of video games. In fact, even before Palworld was released, game studios and developers had already started leveraging AI.

One of the more substantial (and profitable) uses for AI in gaming right now is for Upscaling, a technique that reconstructs pixelated and lower-resolution imagery into a higher-resolution interpretation.

NVIDIA has been using its own proprietary version of Upscaling, called DLSS, to increase the framerate in video games, practically offering free performance increases at a negligible cost in 3D image sharpness. AMD also has something similar but is less reliant on AI.

Meanwhile, procedural generation is also an area that AI has affected in video games. Procedural generation is the process of randomly generating 3D environments depending on the player’s proximity or availability in the 3D space. This helps lead to potentially near-limitless content.

Outside of generative AI, some developers have also taken to AI to perform data mining and analysis on player behavior. This helps a lot in live service or online games for planning content and gauging interest.

The Far-reaching Implications of AI Use in Gaming

Even Palworld’s relatively light AI controversy has had some lasting impact on game development. Steam, for example, has revised its publishing policies where studios now have to announce whether certain assets in their games were generated using AI.

It goes without saying that the more fundamental uses of AI in gaming have more lasting and larger effects on the industry as a whole. 

NVIDIA’s frame generation tech, DLSS, for example, is steadily becoming the industry standard now for boosting hardware performance in gaming and is sure to be a staple for the next generation of consoles (especially those that want more hardware longevity). It does have its downsides, of course, but it’s by no means an inherent fault of the AI.

Frame generation from NVIDIA has presumably led to certain game developers cutting corners in game optimization since they can just make up for it with DLSS. The result is that system requirements for some of the more modern games have shot up instead of giving more breathing room for older hardware. Now the new games demand the latest DLSS for smooth framerate.

Games like Remnant 2 and even Star Wars Jedi: Survivor are quite notorious for this. They have been cited as examples of why gaming is becoming more expensive when the ideal intent of DLSS was to boost the gaming performance of older hardware.

Procedural generation isn’t without its domino effect. While it’s a game development process that immensely cuts costs, there’s no certainty that the content it will produce for the game will be something enjoyable or at the very least, something that doesn’t insult the intelligence of players.

No Man’s Sky and even 2023’s Starfield both used AI procedural generation to populate their planets. Consequently, Starfield was lambasted for its bland planets and repetitive missions despite raising its price to $70.

AI’s Potential Still Outweighs Its Drawbacks

It’s still important to note that these drawbacks we mentioned whether it’s from Palworld’s speculated asset generation to the “shrinkflation” of games due to Upscaling and procedural generation, are not the fault of AI itself.

AI in gaming (and just about most areas) still has plenty of untapped potential.

The renewed popularity of the RPG genre thanks to Baldur’s Gate 3 has paved the way for testing grounds on what AI can easily achieve given the right tools. Long before Baldur’s Gate 3 was released, the developers were already testing the game with an AI bot for quality assurance purposes.

AI notably helped develop Baldur’s Gate 3 by recreating bugs and stress-testing multiple hours of gameplay in a much shorter time than what human gamers need to spend. 

This helped the game’s indie developer create an RPG masterpiece at a pace faster than most humans could. Imagine what AI could do for a game similar to Baldur’s Gate 3 in five or ten more years. 

We could have infinitely dynamic dialogue and branching RPG paths, spontaneous procedural generation, or maybe even AI opponents that act and behave like actual humans.

It goes to show what a proper use of AI can do for video games.

Even DLSS right now lets you have acceptable framerates despite the use of uber-realistic, demanding lighting techniques such as Ray Tracing or Path Tracing. Procedural generation is often also seen as an answer to the content-starved masses of gamers and gaming’s ever-increasing popularity.

In its early stages, of course, AI can still be deemed as a double-edged sword. It can help the gaming industry progress, but it may also introduce some unintended negative effects, the most notorious of which are lay-offs from cost-cutting AAA companies where human employees keep getting replaced by AI.

AI is a Double-Edged Sword that Needs a Good Wielder

Pardon the philosophical rhetorics, but human beings have always thrived on tools and the proper utilization of the latest technology to propel civilization forward. It’s not unreasonable to expect the same for the video game industry, which still mostly consists of humans (for now).

AI is one such tool, and it’s no more harmful than a sword, or a gun, or the source of all evil, as they say. When placed in the right hands, the results speak for themselves with Baldur’s Gate 3, and it’s a beautiful result given how it was produced by an indie studio.

Therein lies the challenge for the human race; finding good wielders for its latest double-edged sword.