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HoYoverse Charts New Frontier in Gaming with AI and Open-World Innovation

LifestyleHoYoverse Charts New Frontier in Gaming with AI and Open-World Innovation

For years, Chinese video games struggled to capture the attention of American gamers, despite the popularity of titles from countries like Japan and Finland. That changed dramatically with the release of Genshin Impact five years ago. Developed by HoYoverse, the global brand of Shanghai-based miHoYo, the game introduced players to a fantasy world of anime-style characters and became a global sensation, earning around US$6.2 billion in mobile revenue alone.

HoYoverse followed this success with Honkai: Star Rail and Zenless Zone Zero, bringing their total mobile game earnings to over US$8.4 billion. However, each new release has gradually drawn users away from earlier games, significantly reducing their revenue. This internal competition has highlighted the urgent need for new ideas beyond anime role-playing games and gacha mechanics.

Co-founder Cai Haoyu has stepped away from managing HoYoverse to focus on innovation through a California-based AI start-up called Anuttacon. This venture explores non-traditional interactive media using artificial intelligence, aiming to reshape digital experiences.

Meanwhile, HoYoverse is expanding its game portfolio by recruiting talent from major Western developers like Ubisoft and Electronic Arts. It is currently developing new open-world and farming-simulation games in an effort to reach broader audiences. These ventures mark a major departure from its traditional style and pose significant risks in a gaming market facing stagnant revenues and rising development costs.

One high-profile project, internally known as Project Shanghai and inspired by Grand Theft Auto, has undergone multiple reboots. Coordinating development across different time zones has led to delays and layoffs, particularly among its US-based staff. Despite these setbacks, HoYoverse continues to bet on the future, including potential shooter games hinted at in recent job postings.

At the heart of this next chapter is a vision of AI-generated content powering immersive virtual worlds. Cai’s Anuttacon, supported by AI veterans from Microsoft and Meta, is developing a space-themed AI game titled Whispers from the Star. However, gamer sentiment around AI remains mixed, with concerns about reduced creative quality and job losses in the industry.

Still, with strong support from the Chinese government and access to Asia’s growing game development workforce, HoYoverse remains well-positioned. As the global game industry shifts eastward, the company looks to combine its deep talent pool with innovation to shape the next era of interactive entertainment.

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