I think the problem that the concept over-hypes itself already in the name. But I consider "AI" and "game AI" to be very different.
I wrote two whole chapters about game AI in "Tricks of the Mac Game Programming Gurus" in 1995, probably one of the longer texts about the subject at the time. But I didn't call it "game AI" because "AI" was such a hyped concept, I called it "behavior" and "environment". But it was about the usual stuff, basic behaviors (hunter, evader, patrol), path finding, FSMs, game state analysis...
Today I am teaching graphics and game programming, I have similar material in my textbooks, but now I call it "game AI" and I actually consider the concept a nice contrast to AI. Game AI is well known to be limited, so we don't expect wonders, which is a good thing.
My favorite game AI techniques are flocking and influence maps. They can really produce interesting and convincing behaviors. But do spice it up with some randomness.
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