Edmonton-based Artificial Agency has signed up a veteran video game executive to help sell its AI gameplay technology to major studios and indie developers.

The startup recently hired Greg Canessa as its new chief operating officer. He was most recently president at Sequence, a Toronto-headquartered blockchain firm. Before that, Canessa was an executive at Google’s shuttered Stadia games project, publishers Activision Blizzard and PopCap, Microsoft’s Xbox unit and Sony’s GSN mobile division. 

Artificial Agency has developed a so-called behaviour engine, which game developers can install to autonomously run characters, encounters and other features in their titles. The AI can power new experiences for players, and “types of games that were impossible any other way,” said CEO Brian Tanner.

Studios are already trying out the firm’s tools, although it declined to say how many or which ones. A popular early application has been virtual players, which can help with user retention, according to Tanner. “A lot of these games have really steep learning curves,” he said, with new players often “completely stomped” by more experienced ones when they start.

Artificial Agency’s virtual players act as AI squadmates, protecting less experienced gamers and helping them learn how things work. It’s “as if you were joining a game with some friends that were helping you along,” Tanner said. One developer is already using the technology to add a single-player mode to a multiplayer game. Artificial Agency claims its virtual players are more lifelike than the bots that some developers have long paired with human players. 

Studios can also use the behaviour engine to power more complex non-playable characters (NPCs), as well as AI game directors, which can adapt play in real-time based on in-game choices.

AI agents can “create gameplay experiences that don’t exist today in the world,” Canessa said, helping developers execute ideas that would otherwise have been too laborious to attempt. Take the example of a never-ending game that keeps generating new scenarios and realms for players to explore. Currently, all of that would need to be scripted and built by hand, which could take hundreds of millions of dollars and as long as a decade to develop. 

“That idea you had 10 years ago that wasn’t possible—what if it’s possible now?” Canessa said.

Several major video game companies have recently made significant staff cuts and shuttered studios. Ubisoft closed its Halifax operation and laid off workers in Toronto this year, while Tencent and NetEase both recently wound up Canadian units before they’d released any titles. 

The industry “is really struggling right now,” said Canessa, citing the layoffs, rising development costs and timelines and challenges with attracting and keeping players. “Generative AI has the potential to transform that space,” he claimed.

Artificial Agency’s technology isn’t meant to replace the industry’s human workers, Tanner said. The primary function of its AI tools isn’t to come up with the narratives, voices or textures that writers, actors and developers currently produce, he said, but to generate in-game behaviour that carries out the vision of the humans who created the game. 

For example, one studio deploying Artificial Agency’s technology has hired professional voice actors to record lines spoken by virtual players, with the AI deciding when to say them, according to Tanner. 

Artificial Agency will charge studios a monthly fee per game to use its AI tools during development. It often lends clients a couple of engineers to teach their developers how to use the technology, and to make it work with their existing software systems. After a game is released, the firm could earn licensing fees.

Canessa, who is based in San Francisco, is charged with spreading Artificial Agency’s AI across the games industry. The firm plans to price and package the technology so it can be used by both major studios that produce blockbuster titles as well as smaller indie developers. The firm has already built integrations with the two leading graphics systems used by much of the industry, Epic Games’s Unreal Engine and Unity’s eponymous engine. Artificial Agency could eventually expand beyond gaming into similar sectors like media and entertainment, according to Canessa.

Tanner, Artificial Agency’s head of agents Alex Kearney and two other former staff at DeepMind Alberta co-founded the startup in March 2023, after Google’s AI division closed its Edmonton office. Artificial Agency has raised US$16 million to date, according to PitchBook data, from backers including Radical Ventures, Toyota’s venture arm and BDC Capital. The firm employs 30 people full-time and plans to expand this year, though it’s not currently fundraising, Tanner said.

Many major gaming firms already have internal AI teams. Ubisoft has experimented with using the technology for both NPCs and autonomous teammates. Epic has launched AI-powered conversations in its flagship Fortnite. 

Developers can also use code-generation tools and plug into commercial foundation AI models to mimic some of what Artificial Agency’s agents can do, Tanner said. However, studios may run into challenges when OpenAI or Anthropic upgrade their systems, as they frequently do—newer models tend to cost more, while older ones may get slower because the infrastructure on which they run has been reassigned. 

Artificial Agency, by contrast, will train small models for its clients based on gameplay data, providing a faster and cheaper source of AI that they can own and reuse. “These studios are going to want to buy, instead of building themselves,” Tanner said.

The startup is betting that will mean a big market for its AI tools. “Most game developers are in the games business to make games—the creative aspect, not the technology,” Canessa said.