That's a very difficult question. If you mean, have we stopped pushing for innovation in that aspect, then for the most part I'd say that it has, yes. Games just don't put any work into making interesting and dynamic and challenging AI anymore. ESPECIALLY the big popular genres. Hell, even games like ArmA don't do much at all with their AI.
However, we have not peaked, we have not hit some sort of boundary because it's harder to get much better. It's actually not. Hell, some of the best AI I've seen was modded AI in ArmA 2. Halo 3 probably has AI 3-4 times better than any CoD game that has come since H3 released. But games have turned into "hide behind a rock and run around like an idiot" for enemy AI. Yet in Halo 3, there were group dynamics that impacted behavior as an encounter progressed (ie parts of that group were removed or added) and complex actions such as maneuvering and using the multitude of tools at their disposal against the player, and a whole lot of it all going on at once. In Halo 2, the brutes were just damage sponges that ran directly at the player. In Halo 3 they were smacking objects out of the way or clambering over obstacles to improve their position on you, they were coordinating with other brutes, they were using equipment against you or for their own benefit. And as you carved through their ranks they changed their behaviors.
And there have been folks working on modifying ArmA's AI to greatly increase the complexity and tactical ability of the AI in the game. AI gained the ability to making bounding maneuvers, suppress and support elements, maneuver to flanks, search an area if players pulled back and reduced their presence, throw smoke to cover an advance, etc.
I actually think more than anything, this is a manifestation of the insistence by the industry that players don't want to be engaged and challenged and pushed back on. So difficulty scales with damages and health values instead of aggression and tactical ability. Ultimately you can give an AI a pretty giant number of actions based on a large number of triggers. That isn't hard, exactly. Developers just don't want to push players to be more aware, more tactically minded. They just want to let them pull the trigger and then pull the other trigger and watch bodies fall.
Someone also made the point about Ai just having to exist in more complex environments and that is certainly another factor in the AI situation currently. AI has to be capable of doing basic things in environments that are much less conducive to those basic things than the environments of 10-15 years ago. Games were less dynamic, smaller, and less detailed. Now there is a lot going on for the AI to cope with just to function on a basic level. It doesn't make things VASTLY more difficult, but certainly provides an extra level of challenge.
No it hasn't stagnated. The issue is that "AI Is Hard". We need more than 12 years to fix the problem.
That is pretty much you saying that is has stagnated.
Although, I disagree that it's all that hard. We don't have much in the way of even relatively complex AI's. It takes a lot of work but it's not so much that it's hard.
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