Capcom ($CCOEY) ($CCOEF) stock is up today after the video game developer and publisher revealed its use of generative artificial intelligence (AI). Capcom has started using generative AI to assist it with game development, mainly to reduce the time spent generating ideas for background elements. That includes creating “thousands to tens of thousands” needed in game creation.
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However, Capcom isn’t handing over the reins of game development to AI. Instead, the company uses these ideas to assist art directors and artists working on games. It also doesn’t use generative AI to create stories, characters, or gameplay, leaving those tasks to human hands.
Capcom Technical Director Kazuki Abe is behind the company testing AI waters. He believes using the technology will benefit gamers and creators by allowing them to make higher-quality games at a reduced price. Capcom intends to build on this AI development system and may provide it to partners.
What This Means for Capcom Stock
AI has been a hot topic recently with more companies embracing the emerging technology. In Capcom’s case, it could be a major boon to game development by cutting time-consuming and expensive tasks. If this reduces production costs, it could mean increased profits for the video game company.
Investors appear receptive to Capcom utilizing AI in game development as the company’s shares are up 2.53% as of this writing. That’s a welcome change from its 1.53% drop year-to-date, though shares are still up 15.73% over the past 52 weeks.
Is CCOEY Stock a Buy, Sell, or Hold?
Turning to Wall Street, COOEY lacks analyst coverage, but the same isn’t true for sister stock CCOEF. Four-star Jefferies analyst Atul Goyal has a Buy rating and a $27.19 price target for Capcom shares, representing a potential 28.86% upside.
