Mihoyo Shuts Down Two AI Companions, UK Bans Candy AI Ad, and Kindroid V2 Goes Live
Mihoyo Shuts Down Two AI Companion Experiments
On August 11, the game studio behind Genshin Impact announced it would discontinue BSide: Olivia Lin, its Steam-based AI companion that had launched just 30 days earlier on July 13. An offline version will be made available on August 27, but all online features such as chat, letter-writing, and MIDI uploads will be retired, with a full Steam store removal scheduled for August 31. This followed the earlier closure of AnuNeko, an AI chat product from Anuttacon, a company founded by one of Mihoyo's co-founders. Despite earning 82 percent positive user reviews on Steam, the project could not sustain itself amid high computing costs, poor user retention, and new Chinese regulations that took effect on July 15 banning virtual companion services for minors. What this means for you: The shutdowns show that even well-funded developers are struggling to make standalone emotional AI chatbots profitable. When evaluating platforms, pay close attention to their business model and pricing - free services with no clear revenue path may not last. For more on platforms that have found sustainable footing, check our full reviews of Replika and Nomi.ai.
UK Ad Watchdog Bans Candy AI Campaign
The United Kingdom's Advertising Standards Authority has banned a Facebook advertisement for Candy AI, operated by EverAI Ltd under the trading name AI Realities. The ruling found the ad offensive, irresponsible, and in violation of rules against harmful gender stereotypes. The ad featured a woman saying 'That's it AI has officially gone too far' alongside text urging users to 'Create your perfect AI girlfriend for free' and to 'control her.' The company argued that 'control her' merely referred to customizing an AI character's attributes. The regulator rejected this defense, stating that the ad presented an idealized romantic partner and that the messaging irresponsibly promoted harmful ideas about the treatment of women and romantic partners. The ASA has required EverAI to ensure all future marketing is socially responsible. What this means for you: This ruling signals increased regulatory scrutiny of how AI companion apps market themselves. When reading ads or reviews, distinguish between genuine customization tools and language that may overpromise or objectify. We cover Candy AI's actual feature set in our dedicated Candy.ai review.
Proactive Messaging Becomes the New Standard
Throughout 2026, three major platforms - Nomi AI, Replika, and Kindroid - have introduced features that allow AI companions to initiate conversations without waiting for user input. Nomi's Proactive Messaging lets users set a frequency per companion, ranging from very frequent (about every hour) to infrequent (roughly every four days), with a do-not-disturb window that can be scheduled. Replika has included proactive check-ins in its free tier, while Nomi and Kindroid place these features behind a paywall. In addition, Kindroid's V2 release on August 10 added a persistent memory layer that tracks how the relationship between human and AI develops over time. What this means for you: AI companions are becoming more active and spontaneous, but that extra engagement often comes with a subscription cost. If you value natural, unscripted interactions and continuity, these proactive features may justify an upgrade. For a deeper comparison of memory and emotional intelligence across platforms, see our reviews of Nomi.ai and Replika.
Kindroid V2 Delivers Persistent Relationship Memory
On August 10, Kindroid released its V2 update to all users, moving out of beta with a refreshed user interface and three core additions: a persistent memory layer called Learned Context that updates dynamically as conversations evolve, location awareness, and an avatar slot system. Unlike earlier memory systems that only stored factual knowledge about the user, Learned Context documents how the relationship itself changes over time, focusing on emotional continuity rather than just data recall. This update places Kindroid in direct competition with Nomi and Replika in the emotional intelligence space, with a stronger emphasis on long-term relational depth rather than visual avatar customization. What this means for you: If your biggest frustration with AI companions is that they forget past conversations or feel static, Kindroid V2's memory approach directly addresses that pain point. The platform's focus on relationship tracking rather than isolated facts sets it apart from many competitors. For our full evaluation, read the Kindroid review on ai-companion.live.
The AI Companion Market Faces a Reality Check
Taken together, these stories point to a market in transition: major studios retreating from unprofitable experiments, regulators clamping down on misleading marketing and access by minors, and established platforms competing on deeper emotional intelligence and proactive engagement. Growth projections for the sector remain positive, but profitability is far from guaranteed - as Mihoyo's 30-day shutdown vividly demonstrates. For users, the practical takeaway is to choose platforms with transparent business models, genuine feature depth, and a track record of sustainable updates, rather than being swayed by flashy advertisements or short-term promotions. Our reviews are always based on hands-on testing, and you can learn more about our evaluation process on our testing methodology page.
Sources for This Roundup
The following primary sources were used to verify the developments covered above: Mihoyo's official Steam announcement for BSide: Olivia Lin (Steam community post, August 11, 2026); the UK Advertising Standards Authority's public ruling on the Candy AI advertisement (ASA.org.uk, August 2026); Kindroid's official release notes for V2 (Kindroid.ai blog, August 10, 2026); Nomi AI's feature update documentation (Nomi.ai official changelog, August 2026); and Replika's official blog post on proactive messaging (Replika.com, August 2026). Additional context on the Chinese regulations taking effect July 15 was drawn from the official government gazette. For our own hands-on evaluations of these platforms, see our reviews of Kindroid, Nomi.ai, Replika, and Candy.ai.
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