In 20 years every game made will use AI heavily and the games will be much better for it.
AI is a tool. We do not need videogames to be completely automated but also we do not need to waste time doing work the computer can do for us.
Instead of thinking of AI as a human replacement, think of it as a new type of computer input. We have keyboards. We have mice. We have mics. Now we also have AI.
We can input concepts into the PC. So an example would be macros. Currently I can create a macro in excel and run it in a workbook. I cannot run in a million workbooks without writing code to do that which I don't have the ability to do.
However I can ask AI to do it and run that macro across a million workbooks with just one entry into the computer. No coding. Can you see how this would be useful for developing videogames? Because the PC can now understand more than just numbers and letters, it can understand concepts and act on them, we have a new input into the computer that can save a lot of time. It is a tool, not a person. It removes busy work. It allows us to extrapolate ideas across a whole build in seconds instead of weeks/months. Even if it does the job poorly it allows us to sample the idea in real time in the game to decide if we want to pursue it and began the process of work. It improves the game and is one of the most valuable tools we have already.
I think this gets it mostly right.
However, AI will be and remain limited by the user.
AI generated fake-games/video like in this thread? Nope. Not real. Not simulated. Not shareable. Not directable enough.
AI-assisted traditional workflows (programming, animating etc.?) Absolutely. We see some of this already nowadays, although pretty limited.
Cascadeur for example uses AI for its new Inbetweening feature, that generates motion between poses. Still somewhat limited, but great for what it is right now.
AI assistants coming to UEFN, helping you generate Verse code to make games in Fortnite.
ChatGPT and variants can write some small amounts of proper UE-code (emphasis on the small).
However: AI aka LLMs doesn't 'understand'. It's not just an input <-> output mechanism. It's a black box. You can give it your intent and hope for the best, unlike a mouse or keyboard.
AI gives you approximations to what you want. Sometimes those reach 100% accuracy and therefore correctness, but whenever the use case gets a bit more advanced, you will forever be limited by your own capabilities.
If you know a little bit of Javascript, and you generate code for a Snake-type of game, you are able to understand the generated Javascript code, and make tweaks as needed, and even expand it a little by using AI and your skills.
You will get somewhere as a beginner. But that's all it can do for you. Any kind of topic that has nuance and technical details, such as game dev, AI will get wrong, 100% of the time.
And on a topic where correctness is required, you can not rely on AI.
Code that doesn't compile won't mean you have 99% of a game, it means you have 0% of a game until you fix the issue. And if AI generated the wrong code, and you aren't smarter than the AI, you won't be able to build a game, at all.
The way I see it, the barrier to entry in some fields is going to get lowered, but the ceiling will remain as high as ever, and AI is not going to help with getting to that ceiling because you are offloading your mental process and understanding and achievement to a separate entity.
So at most, AI is going to help automate tasks that a professional already knows how to do. It will help with iteration times and R&D, but will be limited by what its user can do.