It depends what the game does. If it's a two-player board game,look into the "Mini-max" search algorithm for games (see [4-1]). In most commercial games, the AI is is a combination of high-level scripts and low-level efficiently-coded, real-time, rule-based systems. Often, commercial games tend to use finite state machines for computer players. Recently, discrete Markov models have been used to simulate unpredictible human players (the buzzword compliant name being "fuzzy" finite state machines).

A recent popular game, "Black and White", used machine learning techniques for the non-human controlled characters. Basic reinforcement learning, perceptrons and decision trees were all parts of the learning system. Is this the begining of academic AI in video games?