Modbox, a multiplayer game creation sandbox with SteamVR support, has recently demonstrated the power of modern machine learning technologies. A combination of Windows speech recognition, OpenAI’s GPT-3 AI language model and Replica’s natural speech synthesis resulted in two virtual characters engaging in meaningful conversations. This demo is arguably one of the first artificially intelligent virtual character interactions ever seen. Though Modbox officially launched late last year after years of public beta development, Microsoft holds exclusive rights to use GPT-3 commercially – meaning this feature won’t be added to Modbox itself. However, this video demo offers an insight into what interactive gaming could look like in the future. Language models such as GPT-3 will have a massive impact on game design and open up entirely new genres for players to explore. One issue that may arise from cloud-based services are delays between questions being asked and responses being given; however Google and Amazon are already using custom chips within their smart home devices which reduce response times for digital assistants significantly – so it may be possible to do something similar with language models running on device too!