July 20, 2024

Microsoft Collaborates with Inworld AI to Introduce AI Game Development Tools for Xbox Studios

Microsoft has partnered with Inworld AI to develop game development tools for Xbox, providing developers with the ability to create characters, generate scripts and quests, and more. This lengthy agreement includes the integration of an AI design copilot and an AI character runtime engine, both of which are optional and can be utilized to varying degrees. While the utilization of AI in art has faced criticism for lacking originality and potentially diminishing job opportunities for artists, Microsoft believes that improved tools will allow creators to produce exceptional games.

Haiyan Zhang, General Manager of Xbox Gaming AI, stated in a blog post, “At Xbox, we believe that with better tools, creators can make even more extraordinary games.” This partnership combines Inworld’s expertise in generative AI models for character development with Microsoft’s advanced cloud-based AI solutions, including Azure OpenAI Service, as well as Microsoft Research’s insights into the future of gaming and Team Xbox’s strengths in providing accessible and responsible creator tools for all developers.

The AI design copilot is a toolset designed to assist game designers in transforming prompts into scripts and dialogue trees. On the other hand, the character runtime engine enables the dynamic generation of plot beats and quests. AI integration in games has already been witnessed through procedural generation, such as the inclusion of over 1000 planets in Starfield. Additionally, enemy AI has been utilized in games for quite some time.

Inworld gained attention in August for releasing a modded story mode called “Sentient Streets” for Grand Theft Auto V. This mod required players to investigate a peculiar AI-worshipping cult, featuring characters that conversed using AI-generated dialogue on the spot. However, the mod was later taken down by publisher Take-Two, resulting in a strike against the creator’s YouTube channel. Inworld’s AI technology can also be employed for narration in top-down RPGs, warning players of off-screen events and responding to inquiries.

Microsoft has made substantial investments in artificial intelligence, including a $10 billion investment in OpenAI. The company has integrated AI tools into its suite of services, and Windows now features an AI copilot. Nevertheless, it remains to be seen whether titles utilizing Microsoft’s AI toolset will be permitted on other platforms. Valve announced plans in July to crack down on games incorporating AI-generated assets if the developer does not possess the necessary copyright. This is because when a prompt is used to create content in AI, the software repurposes existing assets without appropriate licensing, potentially infringing the rights of other artists and writers. The outcome of Microsoft’s partnership in this context is uncertain, but as long as AI content is used to drive innovation and create original works, there should not be any issues.


  1. Source: Coherent Market Insights, Public sources, Desk research
  2. We have leveraged AI tools to mine information and compile it