I've used an LLM chat bot to play D&D with and it worked pretty well. At least for running the game and making shit up based on the campaign I wrote it to run. It wasn't really much different than playing with real people; not least of all because it wasn't perfect. It would make mistakes, just like a real person. It would misinterpret the rules, like a real person.

So I think this kind of "AI" could be used pretty well for games. However, from how these major companies have been using it, it won't. Because they're gonna try to get the entire fucking story written by it, and that's when it'll fuck up.

It's decent at making up new shit on the fly creating dynamics never really found in video games, but it isn't always necessarily congruent or logical. A game like Dwarf Fortress could benefit from it, but a game like The Last of Us would suffer from it.