Game developers have long sought the “secret formula” that drives game retention – a combination of a few key elements that keep players coming back for more. A game’s graphics, mechanics, concept, and feedback mechanisms are just a few examples of the components that have dominated this conversation for decades. 

Enter AI Avatars: digital characters with distinct personalities, providing interactive experiences that offer a new, ever-evolving take on a classic gaming element: 

Companionship.

Digital avatars are not a new concept for developers or gamers. That said, AI has unlocked a new realm of possibilities for these characters and their place within the gaming ecosystem. As developers build AI companions that can learn, adapt, and engage with players on a highly personalized level, we’re collectively approaching a future where these avatars are seen as genuine, digital friends. 

What are AI Companions? 

AI companions are digital avatars powered by Large Language Models (LLMs) designed to interact with users in deeply personalized ways. 

Systems like ChatGPT and Perplexity can technically be considered AI companions. However, these interfaces resemble a text message conversation, creating a cold and distant feel for the user. AI avatars, such as Genies, provide a visual layer to the companion experience that can then be imported into other digital experiences. 

In the context of gaming, AI companions primarily serve as in-game characters. These AI avatars can respond dynamically to player interactions, resulting in fresh gameplay experiences and unique dynamic conversations. They are also drastically different from the digital companions or non-playable characters (NPCs) of previous generations. 

Prior to the rise of generative AI and LLMs, digital companions and NPCs were programmed to regurgitate repetitive lines of communication to players. They were limited to a specific number of preset actions, which would trigger depending on the player’s in-game behavior (“Do a Barrel Roll!” - anyone?). 

When Rockstar Games’ blockbuster Red Dead Redemption 2 first launched, the characters populating the world effectively engaged users and boasted a wide range of unique personalities. Shopkeepers altered their dialogue depending on how often the player bathed, while animals would migrate away from the player if they smelled ripe. 

Eventually, the “wow” factor of the NPCs’ adaptive behavior wore off, and their recycled lines became white noise to the player. These triggered responses, however, were indicators of the impressive technological advancements that followed a few years later. 

How do AI companions help drive player retention? 

AI companions drive retention and encourage longer play times by establishing emotional connections with players. 

Player retention inherently decreases as a game’s lifecycle progresses. For the average PC or console game, anywhere from 35-40% of players typically return to a game one day after installing it. That figure drops to 10-15% after one week, and plummets even further to anywhere from 5-10% one month after their first play session. Developers know they are in an uphill battle in this regard, leading many to experiment with new, interactive technologies to keep players entertained and returning to their games. 

When players feel as though they are playing with a friend, rather than a non-responsive NPC, they are more likely to develop long-term connections with their avatar. This approach to player engagement adds an entirely new dimension to “sandbox gameplay.” Each interaction between players and their AI companion is composed of unique discussion topics, responses, questions, answers, and physical reactions, meaning that no two in-game experiences are truly the same. 

Two players may encounter similar circumstances while entering a boss battle in an action game, but their progression may look and feel wildly different depending on their interactions with their respective companions. One player may find the battle to be tense as they talk strategy with their determined companion, while the other may laugh their way through the fight as their AI avatar rattles off jokes. These hyper-personalized experiences, in turn, result in longer durations of play and increased engagement. 

Are there examples of AI Companions boosting player retention? 

Several major game studios have already introduced AI companions into their single-player and multiplayer experiences, and others are likely to follow.

As mentioned earlier, the emergence of AI avatars has redefined what’s possible for in-game character interactions. Game studios of all sizes have embraced AI companionship, including some of the industry’s biggest names. 

Epic Games made headlines in late May after introducing an AI-powered Darth Vader into Fortnite’s Classic and No-Build Battle Royale modes. The NPC companion fought alongside players and used generative AI to converse with them in real time. The companion was responsive to player questions about in-game events, as well as discussions about topics unrelated to the game itself.

Fortnite maintained over 1 million daily players throughout the AI Darth Vader event, resulting in millions of online impressions and countless viral clips being published across Instagram, TikTok, and X.

Epic Games isn’t the only Triple-A studio embracing this new wave of AI adoption. 

The heavily anticipated Grand Theft Auto VI, set to release in 2026, drew media attention back in March of this year after Rockstar Games secured a patent for new AI technology, titled “System And Method For Virtual Navigation In A Gaming Environment.” The patent describes AI-powered NPCs whose actions are partially driven by “real-time decisions made by the NPC algorithm regarding the current state of the game and the environment.” 

As other large title and big-budget game studios begin to experiment with AI avatars, it’s important to note how smaller, independent studios have largely spearheaded this movement. 

In Inworld Origins, the player assumes the role of a lead detective investigating a mysterious explosion. The player must engage with multiple AI-powered NPCs to gather evidence, navigate the neo-noir world of Metropolis, and ultimately solve the case. Released in 2023 by Inworld AI, Inworld Origins is one of many indie games that leveraged early-stage generative AI to implement evolving avatars into its environment. 

Today, indie games are going viral and charting faster than their Triple-A counterparts, but player retention has always posed a challenge for smaller studios. With AI companions, developers can introduce gameplay and character interactions that are constantly changing, enabling them to create experiences that compete with big-budget titles and retain players for longer durations. 

At Genies, our goal is to ensure our AI Smart Avatars enhance a player’s immersion and emotional resonance as they explore new digital environments. We’re committed to ushering in a new age of digital companionship that will see players entrust AI entities to navigate challenges, share ideas, and develop valuable friendships.

Check out how players can interact with their Genies in-game.