By Mark Seavy

Artificial intelligence (AI) and user generated content (UGC) will help drive expansion of interactive entertainment moving forward more as a supplement than an all-consuming replacement for it, executives said this week at the Paley International Council Summit in New York.

While both formats will and are changing the means for content development, they also will need guardrails to ensure they meet consumer demands. While platforms like Roblox and YouTube will continue to champion UGC and likely expand its use through AI, content generated on these platforms, along with that from film studios, gaming companies and other providers, will require tailoring to a wide variety of interests.

“Individuals [at studios and game developers] may not be replaced by AI, but if they are not careful, they will be replaced by people who know how to use AI,” said Strauss Zelnick, Chairman & CEO of videogame publisher Take Two Interactive, whose titles include the Grand Theft Auto, Red Dead Redemption and NBA 2K titles. “But large language models and data sets are inherently backward looking and creativity at its best is forward thinking, and the biggest hits are unexpected. If hits are unexpected data sets are not going to get you there no matter how fancy and fluid, they are. But AI tools are going to make it easier to create assets in games and if you believe otherwise, you are mistaken.”

The encroachment of AI and UGC on the interactive entertainment business will signal incremental rather than wholesale changes much in the way YouTube and Roblox coexist with studio generated films, TV,and streaming series, the entertainment executives said at the summit.

Sony, for example, which earlier this year shifted away from a historical focus on consumer electronics by forging a Bravia Inc. joint venture and licensing agreement with Chinese supplier TCL Industries, is sharpening its strategy around a focus on music, PlayStation videogames, anime, and film businesses, said Hiroki Totoki, president & CEO of Sony Group Corp. That strategy includes building an anime hub under its Crunchyroll brand into  PlayStation 5 in 2027. This move was reinforced by Sony’s finding of a “significant overlap” between videogame and anime fans, said Totoki, whose company is expected to introduce a new PlayStation console in 2028 or 2029. In line with this move, Sony formed a Crunchyroll Storyworks Division that will focus on anime and live-action adaptions produced in collaboration with Japan’s anime and manga developers. Sony also struck a multi-million-dollar marketing deal with Take-Two Interactive’s Rockstar Games for Grand Theft Auto 6, which launches November 19, and has been promoting the title on the PlayStation 5 console.

“There will likely be two tracks where people enjoy the top videogames titles [on PlayStation 5] and those that enjoy user generated content,” Totoki said. “But it is difficult to develop a proper business model for user generated content, and it is a challenge for us in terms of what is the best way to fit with that trend with the proper perspective.”

In addition to AI and UGC, studios and other providers also are faced with making content available across multiple platforms.

AMC Global Media, for example, supplies The Walking Dead, Ann Rice’s “Interview with a Vampire” and other series across cable networks as well as streaming through AMC+ and on-demand services. In a marketing push, AMC released The Vampire Lestat as season three of Interview with a Vampire along with 13 original songs that were available on Apple Music and Spotify, AMC Global Media CEO Kristin Dolan said. AMC Global Media also recently signed a five-year $500 million renewal agreement with Netflix for The Walking Dead,which carries co-exclusive streaming rights for the series’ 371 episodes. Netflix previously had,had an exclusive for streaming since 2011, a year after the series debuted on AMC.

Candle Media is narrowing its focus to Moonbug Entertainment, which it acquired along with the CoComelon franchise in 2021, after selling a majority stake in actress Reese Witherspoon’s Hello Sunshine production to France-based independent studio Mediawan. That agreement emerged amid speculation that Candle Media might seek to sell Moonbug Entertainment, five years after paying $3 billion to acquire it.

“If you have brand consistency and you meet people where they are and keep it the same across platforms, you create a very powerful dynamic and it doesn’t matter where you originate whether it is on network, streaming or AVOD,” Candle Media Co-CEO & founder Kevin Mayer said. “You can take that content and propagate it around but do it a very consistent way.”