A 4-person team developed an AI interactive film game completely independently, and major changes have taken place in the 18-billion-yuan AI interactive film game track.

The popularization of AI technology is completely rewriting the competition rules of the interactive film and game industry. The track barriers that used to rely on heavy capital live-action shooting and professional team operation and maintenance are continuously dissolving, bringing small and medium-sized teams a window of opportunity to enter the market. Recently, *Republican Era Paranormal Tales*, a fully AI-generated Chinese supernatural suspense interactive film and game created by a small team of four, has opened Steam wishlist reservations. Its beta test and ChinaJoy demo sessions have received massive positive reviews, making it a benchmark product for lightweight AI creation.

This niche-themed work with no real actors and all AI-generated content not only stands out with differentiated gameplay and immersive content, but also puts forward the core proposition of the industry: when AIGC lowers the entry threshold of the industry, can small teams make the business model of AI interactive film and games work? After the track's traffic dividend fades away, what is the real core barrier of the industry? Based on the industry observation of DataEye Research Institute and in-depth interviews with the creative team, this paper analyzes the new pattern and development trend of the current interactive film and game track.

I. Niche Theme Breakthrough:

Differentiated Product Logic of Fully AI-produced *Republican Era Paranormal Tales*

Compared with the overabundant urban sweet romance and pleasure-focused interactive film and games on the market, *Republican Era Paranormal Tales* has taken a vertically segmented differentiated path. This work belongs to Yoroll, an AI interactive video game platform under LinearGame, and is created by a streamlined team of four consisting of one senior core creator with experience at top-tier game companies and three other members. The core creator has working experience at top-tier firms including NetEase and Papergames, has been deeply engaged in the creation of suspense and horror content for many years, and has matured capabilities in short drama, comic creation and content rhythm control.

The product is anchored in the Republican-era folk supernatural suspense niche track, abandons the industry's mainstream live-action shooting mode, and realizes full-process AI content generation. Set in the turbulent Republican era, the game unfolds from the perspective of a female journalist investigating folk-related cases, focuses on the eerie mysteries of Yingxian Village, breaks away from the low-level cliché of "jump-scare" in traditional Chinese horror works, and focuses on immersive case investigation and atmospheric narrative. At present, the number of Steam wishlist reservations for the game has exceeded 20,000, and the publicly available Demo on the platform includes four chapters, with a playtime of 90-120 minutes.

In terms of core gameplay, *Republican Era Paranormal Tales* breaks the monotonous shortcoming of traditional interactive film and games that is "pure plot selection and passive viewing", and builds a three-dimensional experience system of plot choice + crisis QTE + two-in-one puzzle solving. Among them, the original "two-in-one puzzle solving" has become the core competitiveness of the product: players need to independently collect scene clues, synthesize key information in pairs according to logical relations, advance the plot layer by layer, and form a closed-loop case investigation experience. Different from linear plot advancement, the puzzle-solving link is deeply integrated with the narrative rhythm, which not only avoids aesthetic fatigue of the horror atmosphere, but also turns players from bystanders into plot participants, greatly improving the game's immersion and playability.

Compared with the grand world view and complex multi-branch settings that top-tier companies are keen on, the small team has adopted an extremely "subtractive" development idea. The team voluntarily streamlines redundant world views and side plots, focuses limited creative energy on the core plot and highlight scenes, deeply explores the eerie encounters of ordinary people in the turbulent era, and creates an authentic Chinese supernatural texture with detailed scenes, camera language and sound effect atmosphere, forming a unique content tone different from assembly-line AI products.

II. Trade-offs in AI Creation:

Tools Improve Efficiency without Replacing Core Creativity, Becoming the Key for Small Teams to Break Through

AI empowerment is the core support for *Republican Era Paranormal Tales* to complete high-quality production with a streamlined team of four, and it is also the core competitive advantage of small and medium-sized game teams at present. In the common perception of the industry, AI can significantly reduce the cost of image material production and basic operation and maintenance, but the team of *Republican Era Paranormal Tales* clearly divides the application boundary of AI, builds a mature creation system of "AI efficiency improvement + manual in-depth polishing", and avoids the template-oriented drawbacks of assembly-line AI products.

Adhering to the AI First creation concept, the team fully applies AI to standardized links such as video generation, prompt optimization, project management, and basic gameplay implementation, to maximize the reduction of production costs and shorten the development cycle. The production cost of traditional live-action interactive film and games is extremely high: the cost of lightweight small games exceeds 1 million yuan, and the cost of high-quality blockbuster works even exceeds 10 million yuan. Relying on AI tools, small teams can quickly produce massive plot materials and scene images without huge manpower and capital.

At the same time, the team strictly abides by the bottom line of manual leadership of core creativity, and clearly defines two restricted zones for AI. The first one is script creation, which is manually polished throughout the process by the core creator with a background as a senior screenwriter. AI is only used to assist in sorting out plot logic and optimizing character motivations, to avoid the "template-oriented defects" of AI writing such as homogenization, lack of emotion and chaotic rhythm, and to ensure the delicacy of the plot core and emotional expression. The second one is puzzle gameplay design, where AI only takes on auxiliary work such as creative divergence and loophole inspection, and core experiences such as puzzle fun, appearance rhythm and emotional feedback are all customized and polished relying on manual aesthetics and industry experience.

This creation mode accurately hits the current pain points of the AI interactive film and game industry. At present, most AI games rely excessively on tool generation, with empty content and serious gameplay homogenization. But *Republican Era Paranormal Tales* proves that AI is a tool to reduce costs and improve efficiency, not the main body of content creation, and manually led creative trade-offs and content polishing are the core barriers to product differentiation. It is worth noting that the unconventional camera language and "uncanny valley effect" inherent in AI-generated content perfectly fit the eerie and absurd tone of Chinese supernatural themes, becoming a unique advantage for the product to shape the atmosphere.

III. Track Pattern Restructuring:

1.8 Billion Yuan Market Expansion, Small Teams Welcome Golden Window Period

Data from DataEye Research Institute shows that the market size of China's interactive film and game industry will exceed 18 billion yuan in 2026, with a year-on-year growth rate remaining at a high level of 20%, and the track continues to expand. The core logic of industry growth lies in, on the one hand, the continuous supply of high-quality content broadens the user circle, and vertical categories such as Chinese suspense and folk horror have extremely stable audiences. The long-term hot sales of the *Paper Wedding* series have long confirmed the commercial potential of this track. On the other hand, the iteration of AIGC technology completely reconstructs the industry's production mode and breaks the cost and capacity monopoly of top-tier companies.

Under the traditional development mode, interactive film and games rely on full-process film and television procedures such as real actors, professional camera shooting, and post-production refinement, which have high cost, long cycle and extremely high trial and error cost, making it difficult for small and medium-sized teams to enter the market. However, the popularization of AI technology has greatly lowered the hardware and manpower thresholds for content production, making lightweight, low-cost and high-creativity products the new mainstay of the track, and officially ushering in the "era of small teams" for interactive film and games.

However, the cooling down of the track and industry reshuffling are coming simultaneously. The previous short-term suspension of miHoYo's new AI companion game has sounded an alarm to the industry: AI only lowers the "entry threshold for product implementation", not the "competition threshold for high-quality content". As the industry's general models and AI tool chains gradually converge, simply relying on AI to generate content can no longer form competitive advantages, and assembly-line mass-produced products will eventually be eliminated by the market.

The track's competition logic has already iterated. Content judgment, aesthetic tone, and gameplay trade-off ability have replaced capital, scale and production capacity, becoming the core competitiveness. For top-tier companies, their advantages lie in capital, IP and technical reserves, which allow them to focus on long-term high-quality products and immersive large-scale productions. The breakout path for small and medium-sized teams is not to follow the trend and involute in scale, image quality and content volume, but to give full play to the core advantages of "light, fast and flexible".

The team of *Republican Era Paranormal Tales* believes that the core barriers of small teams are concentrated in two points: one is unique imagination and content implementation ability. In the current era where AI mass-produced content is overflowing, creative content with memorable points, emotional core and differentiation is increasingly scarce. The other is the iteration ability of rapid trial and error and timely adjustment, abandoning the "big and comprehensive" development thinking of top-tier companies, focusing on single-point breakthroughs, perfecting the core gameplay, and telling vertical stories well to avoid project loss caused by trying to cover too much.

IV. The Future of the Industry:

Farewell to Traffic Involution, IP Refinement Becomes the Ultimate Track

From the perspective of the industry development node, the AI interactive film and game track is moving from "brutal growth" to "refined competition". In the next two or three years, the AI creation threshold will continue to decrease, and the number of products in the track will see a batch explosion, but the industry's business model will accelerate to mature. Vertical segmentation, precise user targeting, and high-quality content will become the core logic for small teams to make profits.

In the past, interactive film and games relied on high production costs, and had to tap into the mass market to achieve profitability. After AI reduces costs, small teams do not need to pursue national hits. They can achieve stable profitability by deeply engaging in vertical tracks such as Chinese supernatural and folk suspense, and precisely targeting core users. At the same time, the improvement of distribution channels and the reusability of AI assets will promote the industry to enter the stage of IP-oriented and serialized development. A set of mature world views, scene materials and character assets can be continuously iterated and updated relying on AI, reducing long-term operation costs and spawning more long-term operated segmented IPs.

The track dividend will eventually fade away, and technical tools will eventually be widely accessible. The products that can truly go through the industry cycle and accumulate user reputation are always high-quality works that take "technology as the tool and content as the core". The breakout of *Republican Era Paranormal Tales* is not an isolated case, but an industry epitome of small and medium-sized creative teams in the AI era. The competition in the interactive film and game track in the future will no longer be a competition of capital and production capacity, but an ultimate contest of creativity, aesthetics and content in-depth capabilities. The refined creation of small teams may continue to reshape the industry pattern.

This article is from the WeChat Official Account "DataEye Game Insight", author: ohzyh, published with authorization from 36Kr.