Character.ai launches AI microdramas where viewers can chat with characters after each episode

Character.ai enters the microdrama arena with its own productions, but with a twist

Microdramas are such a rage these days that nearly every kind of company in the attention economy space -- be they dedicated microdrama apps, social media giants (TikTok and Instagram) or streaming services (Peacock, Amazon Prime and India's JioHotstar) -- is building a product to tap the opportunity. Character.ai, which lets people chat with customized AI avatars, is also tapping this budding market by producing its own microdramas using AI characters. But there's an interesting twist that takes advantage of the company's core product: Users older than 18 can chat with these shows' characters, ask them questions, and even roleplay different storylines. The startup is launching three microdramas to start with: a romance series dubbed "Last Summer," a horror show titled, "The Nighttime Game," and a Hunger Games-like survival microdrama called "Eden Fall." Character.ai says these dramas were created using AI production tools, and in the long term, it aims to help users create their own characters and series. "Starting with a studio-led model, c.ai Series lets our production team develop the format, refine the workflow, and understand what audiences want from Character-native Microdrama entertainment. Over time, the goal is to turn those learnings and workflows into creator tools, enabling users to make their own series from original Characters and share them with a global audience," a company spokesperson told TechCrunch. This is the latest in a slew of recent features from the startup following its shift towards entertainment-focused features last year. In April, it teased a tool called Lorebook that users can employ to create world-building information that characters can reference, and launched another feature called Books that lets users insert themselves into select classic literature titles, or role-play as characters from them. The company said on Thursday that it is also testing a feature, dubbed c.ai FM, that will let users put together audio series, and another that lets you create fiction, called c.ai Reads. The audio series feature is currently available to select users under its experimental c.ai Labs program, which the company says professional writers are using to create serialized audio dramas. There's certainly an audience for this form of entertainment. Users spend more than 950 minutes on Character.AI each month in the first half of 2026, according to Sensor Tower.

Character.AI wants a piece of the microdrama pie

Character.AI's plan to become more than just an LLM-powered chatbot platform is going beyond interactive books, comics, and audio dramas. Today, the company announced the debut of c.ai Series -- short-form, episodic videos designed to be watched and interacted with -- on your phone. Unlike traditional microdrama services that feature cheaply produced, live-action shows starring human performers, c.ai Series are animated and almost entirely made with generative AI. The company's interest in getting into the microdrama space isn't surprising considering that it's projected to become a $26 billion industry in the next few years. And even though some young people have begun to take a stance against gen AI, that might not be an issue for the folks already using Character.AI. Each of Character.AI's microdramas revolves around a different set of characters being thrust into adventures that map neatly onto popular genres like romance, horror, and sci-fi. You can already find plenty of that kind of stuff on other microdrama apps like ReelShort and DramaBox. But what sets c.ai Series apart is the way that viewers will be able to chat with characters after they've finished watching an episode. Character.AI is kicking off this new initiative with three projects. Last Summer tells a story about secret admirers while leaning into an anime aesthetic, The Nighttime Game -- which resembles Netflix's Entergalactic -- focuses on friends playing a deadly card game, and Eden Fall follows a group of elite MMO players into a Ready Player One-style virtual reality that looks a bit like Genshin Impact. The three Series will all debut with 10 episodes that clock in at under two minutes each. The first eight episodes of each Series will be free to watch for all Character.AI users, but the final two will be behind paywalls. Character.AI says that this first batch of Series were all developed by a human-led, in-house studio team "using AI as part of the production workflow." But in the future, it plans to let creators produce original microdramas of their own using the company's AI tools. At a glance, Character.AI's foray into microdramas seems very much like the company following in the footsteps of TV networks like Fox, Bravo, and BET that have already hopped onto the vertical video bandwagon. But when I recently spoke with Character.AI CEO Karandeep Anand, he insisted that microdramas are an organic next step for the platform. "Microdramas are a continuation of that broader arc of becoming a broader storytelling and entertainment platform that we've been on," Anand told me. "This isn't just a one-off thing we're doing because microdramas are the next cool thing; it's a very natural extension of what our users are already doing and it opens up another massive gateway into our community." Though Character.AI could have launched Series "six months ago by hitting three buttons," Anand said that he did not want to rush the feature's release because he isn't interested in putting out video slop. Rather than leading with shows that were wholly made with gen AI, the company enlisted a "fantastic team of Hollywood screenwriters" to develop scripts with a small group of creators who penned extensive bibles detailing each story's lore. Those scripts were then fed into Character.AI's proprietary, agentic pipeline to generate visuals and audio that were edited together with traditional post-production software. Development on these first three Series took a few weeks, which puts their production timelines on par with other microdrama platforms' live-action offerings. The process might have been faster if Character.AI utilized third- party video generation models, but Anand wanted to keep things in-house in order to maintain visual consistency. "The amount of innovation that has happened with text-focused LLMs has been exceptional, but there haven't been equivalent advancements in the multimodal image and models," Andand explained. "Our models make it easier for us to ensure visual and tonal consistency for characters across different scenes." Watching Character.AI's microdramas, you can definitely see that they're more polished than most of the AI animations floating around the internet today. Scenes flow with a clear sense of direction that makes them feel like they were crafted by a person with a basic sense of visual storytelling. The occasional bit of leaden dialogue and stiff facial expressions make it clear that these characters aren't being voiced by actual actors. But when you compare these shows to the low-budget absurdity of most live-action microdramas, it's easy to imagine Character.AI's user base giving them a shot -- if only to play around with the interactive features. Similar to Character.AI's regular chatbots, people will be able to roleplay or simply talk to characters from their favorite Series. One of the major differences, though, is that each episode is powered by a unique LLM that's designed to only provide information that has been previously established on screen. This, Anand explained, is meant to prevent the chatbots from spoiling users with details about things they haven't seen yet. These bots are supposed to be fun, which is also part of the reason why Character.AI is barring its underage users from interacting with them. When I brought up Character.AI's history of getting caught up in scandals regarding children being encouraged to self-harm by its chatbots, Anand was adamant that the company has taken the necessary steps like implementing hard age verification to make itself a safer place. At launch, Series will only be available to users over 18, and while younger viewers will eventually be able to watch the shows, they won't be allowed to chat with Series-focused bots. Character.AI made a name for itself by creating a space where fandom-obsessed people could insert themselves into fictional worlds, and Stories really do seem like the sort of thing that could resonate with this audience if the company can get them hooked.

Character.ai's New Business? Microdramas

Character.ai, the popular and controversial chatbot company founded by former Google engineers, is expanding its business in a surprising way: the launch of a microdrama division. The firm will announce Thursday that it has created a number of AI-driven animated microdramas for its app, hiring Hollywood writers to pen the episodes, which are then generated with artificial intelligence rather than traditional animated techniques. AI is also deployed after the series' are produced to enable users to chat with characters and even engage in their own fan-fiction-style chatbot creations based on them. A representative for Character.ai declined to provide the names of those working on the vertical-video series' but said the company had hired writers and artists with past credits on projects at Nickelodeon, Netflix, DreamWorks and Blumhouse. (Many Hollywood creatives are of course reluctant to come forth with an admission of AI-related employment.) Three series are dropping at launch. They include Last Summer, about a young woman trying to figure out the identity of her summer crush; The Nighttime Game, in which a group of twentysomethings gather for a deadly game in a possibly haunted house; and Edenfall, a kind of Hunger Games-meets-Ready Player One tale set amid a group "beta-testing" a new MMORPG. In the episodes made available to journalists, that last show proved the most compelling, with the slickest concept and most convincing animation. Microdramas -- the pulpy youth-oriented fictional series that have become blazingly hot in the past year -- monetize their audience by selling further episodes and premium subscriptions. Character.ai, also known as c.ai, believes that it can generate added revenue streams with the chatbot engagement and the fan-fiction elements. (The possibility of entering an episode for direct roleplay is technologically at least a year away, CEO Karandeep Anand told The Hollywood Reporter.) AI makes for a natural microdrama fit because the output in the category tends to be high and production windows short. Automation speeds this up further -- Anand says c.ai's timeline requires about 40 days for the completion of a full series compared to a six-month period if the company would animate episodes traditionally. Despite the efficiencies, however, he says c.ai wants to produce fewer series at a higher quality. "Our goal is not to create an AI slop machine for Gen Z," he said. The microdrama format appealed because it shunned the doomscrolling and rage-baiting that has dominated the pre-AI age, he added. "Instead of passive social-media consumption, users are interacting," he said. Still, live-action AI microdramas, when they have been attempted, have not generally worked in the United States, where consumers often develop fandom around the real-life actors. And microdrama influencers tend to be against them. Character.ai has not announced any plans to enter the live-action space at this point, focusing on the less proven realm of animation microdramas. Character.ai has proved hugely popular since formally launching two years ago (it was in beta for two years before that) courtesy of a pair of Google engineers who founded the LLM Google LaMDA. At least 20 million monthly users now create and/or engage with its chatbots, doing everything from seeking advice to playing text-based games. Most users are under 35, and the number of "characters" -- chatbots with unique training data -- is in the millions, often constructed to mimic the qualities of favorite Hollywood characters. Character.ai has also proved fairly controversial, the subject of multiple lawsuits and allegations that its chatbots foster dependency, psychosis and at times even self-harm, with few guardrails or parental notifications. In the one high-profile case, a Florida mom, Megan Garcia, alleged that her son Sewell Setzer III died by suicide as a result of extensive interactions with multiple bots on Character.ai; the case was settled in January. Two Texas families have also sued the company, the state of Pennsylvania is suing c.ai for the "unlawful practice of medicine" over alleged improper representation and disclosures for its medical chatbots, Missouri senator Josh Hawley has issued document requests from the company and several tech giants over concerns of alleged harm to minors, and c.ai has been part of a backlash over so-called "chatbot psychosis," the pop term for overdependence on AI companions and characters. The move into microdramas seems like an attempt to diversify a business that is facing significant headwinds, moving it beyond the kinds of intimate companion-style relationships that give rise to many of those problems. But Anand says the fit is a natural one. "We've always been an entertainment company," he said, noting how many of the chatbots are already based on TV and film characters. The company banned users under the age of 18 last fall in an attempt to address the social-harm concerns. The microdramas are, in one sense, an attempt to win them back. Users under 18 will be allowed to watch the series but chat functions will be disabled if they are not age-verified. Valued by many experts between $500 million and $1 billion, c.ai is estimated by one outside firm to have conducted $50 million in sales last year, an increase of 66 percent over 2024. The company also has a close relationship with Google -- Alphabet in 2024 hired the founders, Noam Shazeer and Daniel de Freitas, and made a non-exclusive deal for its tech -- though the two remain separate entities. The microdrama market is dense, with dozens of companies in Los Angeles and beyond, including CandyJar, ReelShort and DramaBox, churning out the quick consumable videos. Anand said he is not worried about saturation because of the preferences of the people c.ai is currently reaching. "They're already on our platform seeking entertainment," he said. "This is just a new way to give it to them."