With Mihoyo's gacha game revenue down by 30-50% for Genshin Impact, Honkai StarRail, and Zenless Zone Zero, the company is expanding its portfolio... by pivoting more focus towards AI and AI-powered games.

They are investing 14 billion dollars over 3 years and want to take the company towards developing its own LLM AI models.

Mihoyo is attempting to create lifelike NPCs with agentic capability, and they have shown some of it with their showcase of AI-Pompom from Honkai: Star Rail.

It logged over 60 million text chats in just a week after it went live, but was taken down because of cost issues.

They want to expand this to AI NPCs in a 3D environment that the players can interact with. They will have self-evolving behavior, learn, and remember conversations... an experience that will be unique for every player.