I do have to wonder, though, if there isn’t a minority of gamers who are completely taken by the hype of AI in gaming.
Sure, I'll bite. Obviously nobody wants AI slop and the AI bubble killing hardware prices sucks. But I really do hope to one day see something like the holodeck.
Smaller LLM models could be great for expanding dialog options in game. Like tweaked versions of deepseek or others. Or to improve procedural generation and fill a generated place with life and characters. Or some kind of game master, when you do something unexpected that can alter the storyline to fit the new input. A "yes and" improv AI game master. Or maybe ingame crafting of items and armor (all I want is simple elegant armor lol).
I do think if you have concept artists who defines an art style and palettes and creates the characters for a game, using generative tools to "fill out" assets in that art style is also perfectly fine. Generative models that can directly generate AND render 3D models photorealistically plus 3D animations are very interesting too.
Video games are still very "limited" because costs to produce assets are incredibly high and that limits player freedom.
Lower costs to produce games will also increase diversity at least at the high end, and allows for smaller teams to make more creative games - in terms of gameplay at least. A game with new interesting gameplay and generic but aesthetically pleasing assets is win for me.