The era of game AI has arrived, Is the team of Shi Yuzhu possibly "making giants (002558.SZ) great again"?

The development of voice-enabled game models may be the latest interpretation of "AI changing games". On December 12th, Giant Network Group (002558.SZ) unveiled the "Qianying" voice-enabled game generation model at the 2024 China Game Industry Annual Conference. This may also be a significant step taken by Giant Network Group in the field of "game + AI" after Chairman Shi Yuzhu positioned AI within the company as strategically important as the gaming business back in February earlier this year. The "Qianying" game model includes the game video generation model YingGame and the video dubbing model YingSound. With the release of this model, Giant Network Group has achieved a multimodal full matrix layout of self-developed semantic models, voice models, and video models. More importantly, with the upgrade and iteration of the capabilities of the "Qianying" model, AI in the gaming industry in the future will no longer be just an auxiliary tool but will bring revolutionary changes to game production pipelines, interaction methods, and gameplay. Based on video generation technology, it may soon be possible to realize game creation ideas through text descriptions. This could potentially lead to an era of equal participation in game creation, where even ordinary people can be involved in the development of complex games. As a veteran player in the Chinese game industry, Giant Network Group has been deeply involved in the game track for over twenty years. Despite its long-standing reputation, Giant Network Group has always had the most sensitive perception of cutting-edge technologies in the industry. As early as the end of 2022, Giant Network Group proactively established an AI laboratory, which set the stage for the acceleration of the company's layout in the "game + AI" field. In 2023, Giant Network Group launched the "game + AI" efficiency enhancement platform. Earlier this year, self-developed large models like GiantGPT and Bailing-TTS were also introduced. With the recent release of the "Qianying" model, Giant Network Group's journey in the "game + AI" field has entered a new phase. The "Qianying" model includes YingGame and YingSound, demonstrating the feasibility of game creation through simple text descriptions. According to reports, YingGame, jointly developed by Giant Network Group's AI laboratory and Tsinghua University's SATLab, is the first video game generation model with diverse character motion and personalization capabilities, incorporating strong physical simulation features that can generate open-world game videos. On the other hand, YingSound, developed jointly by Giant Network Group's AI laboratory, Northwestern Polytechnical University's ASLP Lab, and Zhejiang University, is a video dubbing model with exceptional timing alignment and video semantic understanding abilities. It can add realistic sound effects to silent videos and has the ability to generalize to various application scenarios. Interestingly, at the same time Giant Network Group released the "Qianying" model, they also launched the "Qianying Collaborative Creation Plan". According to the plan, Giant Network Group will collaborate on modeling technology, model applications, original game projects, and talent recruitment based on the model's base technology. Based on the range of strategies Giant Network Group has employed, it is clear that Shi Yuzhu is not content with just using AI as an auxiliary tool in the company's gaming business. Earlier this year, Shi Yuzhu announced plans for Giant Network Group to explore creating an AI game incubation platform, aimed at lowering the barriers to game development so that game enthusiasts without programming or development backgrounds can also participate in game creation. In fact, the momentum of "AI + games" is currently strong. Around the same time Giant Network Group released the "Qianying" model, Google's DeepMind introduced the second-generation large-scale foundational world model Genie 2. Coincidentally, the world's richest man, Musk, also recently tweeted that his AI company xAI will establish an AI game studio with the goal of "making games great again". With the "Qianying" model and the "Qianying Collaborative Creation Plan", looking back ten months after Shi Yuzhu proposed his vision, we can perhaps start to anticipate the arrival of an AI game era. Competing in the wave of "game + AI" For Giant Network Group and its leader Shi Yuzhu, fully embracing the AI trend is almost a "must-have". It is worth mentioning that as early as 2016, or even earlier, Shi Yuzhu had already noticed the endless possibilities of integrating games and AI. In 2016, Shi Yuzhu joined forces with several domestic capitals to invest heavily in the acquisition of Israeli AI game company Playtika. As a "non-typical" game company, Playtika did not develop games but instead acquired games from other manufacturers and then used AI technology to transform and optimize them. Looking at it from today's perspective, a AI-driven game company like Playtika would naturally be a coveted asset for various funds. However, in 2016, Shi Yuzhu dared to spend a large sum to acquire Playtika, which proves that he already "understood" the potential of AI in the gaming industry back then.The huge value.With the solid accumulation of multi-dimensional AI capabilities, Giant Network Group has established a full set of AI technologies from research to application in the "game + AI" field, and has built a comprehensive technical solution, leading the gaming industry. In terms of AI infrastructure, before the release of the new "QianYing" large model, Giant Network Group's AI Laboratory had already launched self-developed general cognitive dialogue large model "GiantGPT", voice large model "Bailing-TTS", efficient encoding large model "CodeBrain", leading the industry in building a complete large model ecosystem covering text, vision, and speech, and applying it to various links such as research and development, operations, distribution, testing, forming a closed-loop production chain. Based on a strong technical foundation, Giant Network Group is able to further enhance its core AI capabilities and achieve advanced applications of infrastructure. For example, utilizing a large model-driven personable question and answer system can better answer players' doubts and effectively reduce the learning curve for beginners; and for example, companion AI NPCs provide players with intimate relationship experiences, enhancing playability and stickiness. In addition, solutions such as the one-stop AI drawing platform "Giant Mimicry" and the AI voice generation platform "Bailing" have also been launched. In the process of deep collision and integration between AI and games, Giant Network Group has innovatively introduced new AI gameplay. Earlier this year, Giant Network Group's deduction party mobile game "Space Killing" launched a new gameplay "AI Endgame Challenge", which is completely created by AI and is the industry's first AI-native gameplay created based on multi-agent large models. In the game, real players can compete intellectually with AI players in a multiplayer online interactive reasoning scenario, with each AI player's speeches and decisions being produced in real-time by large models, exhibiting high-level strategic, collaborative, and deceptive behaviors. This gives real players more strategic space and has sparked a trend of challenging AI within the player community. From various signs, Giant Network Group's renewed focus on "game + AI" probably indicates that it is not simply seeking to leverage AI to help the company reduce costs and increase efficiency. In the long term, Giant Network Group hopes to achieve disruptive innovation in games using AI as a lever. Based on this long-term goal and looking back at the "QianYing" large model, with the subsequent iteration and upgrade of this infrastructure, Giant Network Group's AI game incubation platform may bring new changes to the entire gaming industry as all conditions become more mature. At that time, the gaming industry may be able to break away from the old paradigm of tens of thousands of practitioners making games for billions of players worldwide, completely breaking through the ceiling of game content creation and opening up new imaginative spaces in the gaming industry. As Musk said, let games be great again. In this historical process, the team led by Shi Yuzhu may also have the opportunity to achieve "Giant's greatness" once again. Investors in the secondary market may also need to look at Giant Network Group with a new perspective and valuation system.