The industry thinks AI is replacing gaming. It may be the opposite.

A few weeks ago, I was walking the halls of Computex in Taiwan, and for the first time in my career, I felt something unusual.

Gaming had become background noise.

Not literally, of course. Gaming PCs were still there. RGB was still there. The giant graphics card displays were still there. But the center of gravity had shifted. Every conversation eventually bent toward AI. Every major hardware company had an AI story. Intel. AMD. NVIDIA. Memory manufacturers. Motherboard vendors. System integrators. Even companies that historically built PC cases and cooling solutions were suddenly finding new relevance because they had something adjacent to workstations, servers, or AI infrastructure.

For anyone attending the show, the message felt unavoidable: gaming is yesterday’s story. AI is the future.

And yet I left Taiwan thinking the exact opposite.

Not because AI is overhyped. It isn’t. Not because gaming will somehow defeat AI. That’s not happening either.

I left convinced that gaming will ultimately become one of AI’s most important delivery systems. And the reason so few people see it that way comes down to a simple perceptual trap: we keep confusing where the money is flowing today with where the technology actually lands.

History suggests those are rarely in the same place.

What the money doesn’t tell you

The scale of AI’s infrastructure buildout is genuinely staggering. In 2024 alone, Alphabet, Microsoft, Amazon, and Meta collectively spent nearly $200 billion in capital expenditure. By 2025, that figure across the four largest hyperscalers was expected to exceed $350 billion, a year-over-year increase of over 30 percent. Goldman Sachs projects AI-related capital expenditure could approach $765 billion annually by 2026, potentially exceeding $1.6 trillion by 2031. McKinsey estimates that total data center investment requirements could reach $7 trillion by 2030.

Investors are following that money, and naturally, AI dominates the conversation.

But infrastructure is not culture.

The technologies that ultimately reshape society are the ones that find a place in everyday life, not just in server racks. And throughout the history of consumer technology, entertainment has been the thing that pulls new platforms into ordinary households.

The internet did not spread simply because it was technologically impressive. It spread because millions of people found concrete reasons to want faster connections. Online gaming was one of the most powerful of those reasons. The arrival of titles like Quake and Ultima Online in the late 1990s, followed by the launch of Xbox Live in 2002 and World of Warcraft in 2004, gave consumers something they actually needed broadband for. The evolution of online gaming and the adoption of faster internet infrastructure reinforced each other, each pulling the other forward. By 2008, demand for internet data was soaring, driven in no small part by the explosion of online multiplayer gaming.

Technology rarely wins because it exists. It wins because people care about it.

Today, with roughly 3.6 billion people playing games globally — representing more than 60 percent of the world’s online population — few cultural forces are more globally connected than gaming. That isn’t a niche. That’s a civilization-scale audience waiting for something new to arrive.

The problem with today’s AI

There is a version of the AI era that wastes itself.

Every hour spent generating low-quality spam, engagement bait, and forgettable content is an hour not spent building the genuinely transformative applications this technology could enable. The tragedy of the current AI boom isn’t its ambition. It’s how much of its energy is being consumed by mediocrity. We’re deploying some of the most advanced computing infrastructure ever assembled to produce content nobody will remember by next week.

That tension sits at the center of what makes this moment so interesting.

The gap between AI’s potential and its actual use today isn’t permanent. It’s a symptom of immaturity. Every powerful technology spends time in this phase, doing lesser versions of what it will eventually become. The internet gave us banner ads and chain emails before it gave us the modern economy. Smartphones gave us flashlight apps before they gave us platforms that restructured entire industries.

AI is in the banner-ad phase.

What ends that phase is the same thing that ended it for every platform before: a compelling use case that captures imagination at scale and gives people a genuine reason to engage.

Gaming has played that role before. It may be positioned to play it again.

The dream of living worlds

For decades, game developers have chased a specific dream. Not bigger maps. Not better graphics. Something harder to build and harder to define: a world that actually feels alive.

They built dialogue trees that branched in hundreds of directions. They created factions whose allegiances shifted based on player choices. They designed economies that responded to supply and demand. And yet, even in the most ambitious open-world games ever made, something always broke the illusion. You could feel the seams of the authored content. The world was ultimately a very large sculpture, not a living system.

AI changes that equation in a fundamental way. For the first time, it is possible to build game worlds as systems rather than stories.

Imagine an RPG where every non-player character possesses genuine memory. Not scripted memory. Actual memory. The merchant remembers cheating you six months ago. The village remembers that you abandoned it during a crisis. Political factions evolve independently even while you’re offline. Stories emerge rather than being authored. The world changes because millions of players and billions of AI-driven agents continuously influence it.

Early versions of this are already appearing. Developers are experimenting with AI-driven dialogue, persistent character memory, and adaptive world states. The technology remains constrained by cost, latency, and reliability, but the direction is becoming increasingly legible.

What isekai already knows

It’s worth pausing on a cultural data point that doesn’t get enough attention in these conversations.

Isekai — the Japanese storytelling genre built around protagonists being transported into fantasy worlds, often aided by a persistent system interface or an intelligent companion — has quietly become one of the dominant entertainment forms on the planet. The genre now accounts for roughly 15 percent of all new TV anime titles. More than half of every isekai series ever produced has been released since 2020. In English-speaking territories, it ranks second only to action in genre popularity.

That isn’t an accident, and it isn’t just taste.

Isekai’s appeal has been studied. A Kadokawa editor described it as resonating especially with people who want to start their lives over with a new identity, a new set of skills, and a world that actually responds to their decisions. Animation critic Charles Solomon wrote that the genre appeals to those frustrated with rigid life plans. The average isekai viewer in English-speaking territories is around 30 years old — prime working-age adults, not teenagers, choosing to spend their leisure time inside stories about entering another world and being recognized for what they can do.

What isekai keeps returning to, in title after title, isn’t power for its own sake. It’s the feeling of having a world that sees you clearly and a companion — a system, a guide, a familiar — that helps you navigate it. That fantasy has become one of the most commercially successful ideas in global entertainment.

AI-powered gaming could become the first technology to make that fantasy real.

Not as fiction. As an actual experience.

The first game that delivers genuine persistent memory, where the world accumulates the weight of your choices across months of play, where non-player characters hold real opinions about what you’ve done and haven’t done, will do something that no chatbot or productivity tool has managed. It will make AI feel like a living world rather than a useful machine.

That distinction matters more than it sounds. Billions of people already understand, at a felt level, what it would mean to enter a world that responds to them. They’ve watched it in Sword Art Online and Re: Zero. They’ve read it in thousands of light novels. The desire is not hypothetical. It’s demonstrated and enormous. The gap between that desire and what currently exists is the opportunity.

Why gaming feels like it’s losing — and why it isn’t

If gaming’s potential role in the AI era is so significant, why does the current moment feel so grim for the industry?

The answer is simpler than most enthusiasts want to admit.

Gaming is not losing. Gaming is temporarily competing for resources against an industry willing to spend almost any amount of money to build infrastructure.

AI’s appetite for hardware is extraordinary. The demand for advanced GPUs, memory, and compute has exploded, and the result is familiar to anyone who has tried to buy a graphics card recently. Higher prices. Longer upgrade cycles. A growing sense that enthusiasts are paying the cost of someone else’s gold rush.

That frustration is understandable. Imagine being told that gaming is dying while watching gaming hardware become increasingly expensive as AI companies absorb every high-performance component they can source.

People aren’t worried because gaming lacks an audience. They’re worried because gaming is no longer the highest bidder in the room.

The industry’s current constraints — strained supply chains, soaring component costs, delayed shipments — aren’t signs that gaming has become irrelevant. There are signs that AI is still immature and consuming everything around it while it finds its footing. The gaming market itself was valued at roughly $298 billion in 2024 and is projected to approach $505 billion by 2030. That isn’t the trajectory of a dying medium.

It’s the trajectory of an industry waiting for its next platform shift.

The loading screen

Transformational technologies rarely arrive fully formed.

The first MMORPGs looked primitive compared to the worlds they eventually inspired. The first smartphones barely hinted at the mobile economy that followed. The first social networks were toys compared to the platforms that now shape global culture.

They emerged awkwardly. Then suddenly.

Of course, AI does not automatically improve games. A world filled with infinitely generated content can still feel empty. Great games succeed because of design, authorship, and intentionality. AI may expand what is possible, but it cannot replace creative vision. The studios that win won’t be the ones that generate the most content. They’ll be the ones who figure out how to use AI to deepen what players actually feel.

That is why declarations that gaming is dead don’t land for me.

Gaming has always been one of humanity’s favorite laboratories. It is where we experiment with identity, competition, storytelling, and cooperation. AI doesn’t replace that function. AI amplifies it. The industry’s current mood feels less like a funeral and more like an intermission.

AI has captured the spotlight because it represents the next great platform shift. What many people miss is that platform shifts require applications that truly capture the imagination. The internet needed websites. Smartphones needed apps. AI will need worlds.

And no industry has more experience building worlds than gaming.

So when people tell me gaming is dead, I don’t see an ending.

I see a loading screen.

The next chapter begins when AI stops being something we build and becomes somewhere we go. When that happens, today’s debate about whether AI is replacing gaming will look strangely backward. The more likely outcome is that gaming becomes the environment through which billions of people first experience AI. Not as a tool. Not as a chatbot. But as a living world.

That possibility is why I left Computex more optimistic than concerned.

The AI era is coming.

Gaming may be how the rest of the world learns to live inside it.