I wish I knew more about how the "AI" gets implemented in games but I don't. I think we agree it's a hard problem to solve but that means it's ripe for the picking for someone to capitalize on a solution that's easy to reuse and works reliably.

Maybe the current approaches are coming at it from the wrong angle???

The reason that the nvidia/intel enthusiasts are especially enflamed right now is because the new graphics APIs favor multi-core CPUs like FX-series with 6 and 8 cores. And the AMD GPU architectures. And yes name-calling is not beneath them and really nothing is beneath them. That's why they are known as the "underminers". Nothing is beneath them. Things are moving very fast now in the graphics arena and is exciting time right now. Even nvidia will benefit from the new APIs but AMD even more so. In the past nvidia has had to optimize games to work well. But the software limitis are being lifted and that helps AMD more than nvidia.

Okay, you're saying it is a technical issue and it's too complicated. From my naive point of view it doesn't seem so complicated that it couldn't be done. But it is probably not been done because it is hard, takes time and lots of money. The benefit of having better AI may not translate to better profits. So hard to justify the cost.

I think that better AI means a better game and a more memorable game. They stand apart from the rest of the pack.

All good points. It is complicated. But in this case the definition matters. I think your definition in this casual context is correct.

But is it a marketing or technical decision to reduce the AI (still using your definition) to the point of idiocy? Seems like a marketing decision to me. But it is a delicate balancing act as you said. Maybe the solution is to allow the player to determine which way they want things to work. Something more comprehensive than just Normal or Hard or Insane, etc. Perhaps they could design an AI configurator like they do for the character hair, face,eyes, etc. But instead you decide an alert radius let's say. Inside the radius NPCs react to noise/movements. Then you could choose what the NPC does when alerted. Move away and hide, go stealthy, come at you, call in back up, etc.

No pipe dream at all, there are some good solid presentations showing that AMD GPUs handle GPU instructions in parallel and nvidia is serialized. Before DX12, Vulkan (and mantle which AMD still works on) nvidia looked better than AMD because AMD could not take advantage of its parallelism. AMD was forced into nvidia's serialized model by the existing software technology then. DX12 and Vulkan are going to change all that. Nothing to do with being a fan. It is simply the facts look them up or deny them, your choice.

There are some good reasons that some people are regretting their nvidia purchases right now. They aren't regetting it because of misinformation. They are regretting it for real, provable performance reasons. There are plenty of videos out there demonstrating why AMD GPUs can parallel process GPU instructions while nvidia has serial processing limitations. Lots of people liked to blame AMD CPUs for poor performance and bottlenecking but there are presentations and videos explaining that neither AMD CPUs nor AMD GPUs were bottlenecked in hardware. No they were bottlenecked by software. DX12 and Vulkan will show the true performance of AMD. Educate your self because that way you'll buy the right hardware now to take advantage of BIG performance gains in the very near future.

Have a look at the ashes of the singularity video with a R9 crossfire setup. In that video all those projectiles are each casting their own light and shadows. Thousands of objects.

We have all seen the AI bait-and-switch with different titles. Is this a marketing decision to make the AI less AI and more AD (artificial dumbness)? They don't want the game to be too challenging because then people get frustrated and don't play it. So they dumb it all down to the lowest common denominator. Making it easier to play.

Or is it a technical hurdle that requires more work on the game and they release with a simpler AI to reduce the amount of development and QA needed and therefore release the game sooner and with fewer bugs/glitches?

I am speculating, since I don't know, that the decision is due to technical limitations because otherwise they would leave in the option for the best AI. That way the player chooses the AI level.

I got bored recently and played Uncharted 3 on higher difficulty and it really was barely more difficult and it didn't seem to have anything at all to do with the AI. It was more about losing health quicker. Maybe less loot too, but sure.

I read the question as "why are gamers okay being lied to and why do we let them get away with it, again and again?" I think the answer is that you have to speak with your wallet. It might be hard to do. For some it's impossible because gaming can be like any other addiction. But if you really want to stand on your principles then you stop buying titles from the company who is lying.

I think they're doing what they need to do.

I don't know anything about those. If they let you pick the parts, that's good. Building your own is not hard and getting parts is easy. Just get good parts no matter what you end up doing. Do not try to save money by getting a cheaper power supply unit (PSU). Also get a graphics card that has at least 4GB or memory. 8GB of RAM is enough for gaming.