At Transcend, we’ve had a front-row seat to the remarkable evolution of artificial intelligence (AI) in gaming. Through our work with Transcend Fund II, we’ve seen AI evolve from a tool that enhances specific aspects of game development to a transformative force reshaping entire workflows, player experiences, and business models. As I prepare to speak at the Milken Asia Summit in a few days, I’m excited to share how AI is rapidly accelerating its influence on the gaming industry - and why this matters for investors looking to capitalize on the next wave of innovation.
The Fast-Evolving Role of AI in Game Development
AI is no longer just making games better—it’s changing how they are made. Studios like Cosmic Lounge have embraced AI-driven tools to dramatically shorten development times, with some processes clocking improvements of 20x or more, all while enabling them to release high-quality mobile games faster. Their Puzzle Engine, which uses AI to rapidly iterate on game mechanics, is a prime example of how AI is reducing barriers for smaller teams.
AI’s impact isn’t just speeding up workflows; it’s expanding creative possibilities. Ruckus Games is using AI to handle complex 3D production tasks that typically require large teams, allowing them to scale their operations more efficiently. At Transcend, we’ve seen firsthand how AI is leveling the playing field for small studios, giving them the tools to compete with industry giants. This isn’t a slow process—it’s happening now.
AI’s Immediate Impact on Monetization and Engagement
AI’s influence extends far beyond game development. It’s transforming how studios engage with players and monetize their games. Fun Country is using AI within their Poker Skill platform to provide real-time coaching, creating an interactive experience that keeps players engaged longer. The real-time feedback powered by AI isn’t just a cool feature—it’s directly tied to increasing player retention by as much as 20% over traditional gameplay models.
Similarly, Live Aware Labs is harnessing AI to analyze player behavior and deliver insights to developers in real-time. This allows studios to optimize their games on the fly, addressing player needs as they arise rather than waiting for post-launch updates. Our team has seen how AI-driven personalization is already boosting in-game purchases by up to 15%, helping studios generate more revenue per user.
AI’s Expanding Global Reach in Gaming
AI’s ability to adapt and scale quickly is opening up global markets for game studios. In regions like Asia, where gaming is deeply ingrained in culture, AI allows developers to localize their content faster and with more precision than ever before. Cosmic Lounge is already taking advantage of AI to tailor their games for different markets and different player types, enabling them to scale quickly and compete with larger players in important growth markets.
For investors, this expanding global reach means that AI-driven studios can enter new markets faster, with less risk, and at a fraction of the cost it once took. This isn’t just an advantage—it’s a game-changer for companies looking to capture new user bases and grow their IP internationally.
Building the Future with AI
The insights I’m sharing at the Milken Asia Summit are drawn from our decades of experience in the industry and recent work with our founders, but their implications extend far beyond our portfolio. AI is not just enhancing what already exists—it’s enabling entirely new business models, creative approaches, and ways to engage with players.
Studios like Fun Country, Cosmic Lounge, Ruckus Games, and Live Aware Labs are leading the way, showing how AI can drive both creativity and profitability. By integrating AI now, these companies are positioning themselves to capture significant market share and build the next generation of gaming experiences.
At the summit, I’ll be discussing how investors can get ahead of this accelerating transformation. AI is here, and its influence is only growing. The future of gaming will be defined by those who harness its power today.
About Transcend
Transcend is a top performing early stage venture capital firm that partners with the boldest founders in the industry to collaboratively build the future of interactive entertainment.
Founded in San Francisco by gaming veterans, the Transcend portfolio features a preeminent group of high growth digital entertainment companies around the world.
More information about Transcend can be found on our website. Follow us on LinkedIn for the latest news from around the Transcend ecosystem.
About Brett Krause
Brett is Managing Director of Transcend and a proven executive leader in the areas of venture investing, games, finance, and banking.
Following a 20-year banking career that included roles as President of JPMorgan China and CEO of Citi Vietnam, Brett spent 4.5 years as Chief Investment Officer at FunPlus, a world- class, independent game developer and publisher, and founder of FPX, one of the world's most successful esports organizations.
Brett speaks Mandarin, Japanese, and French. He is currently based in Zug, Switzerland.
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