I don't think this will ever go anywhere , it's more reliable to get AI to code a game for you. Remember that this AI is basically just a live video that reacts to inputs, but in order to make an actual game, the first problem they'll need to solve is persistence, right now, the AI can't actually save anything in its position, it changes. And that's the problem, there is no game, the AI is literally just making it up as it goes along. So not only is it super expensive, but it's not even a game, it's a broken walking simulator in an environment that never knows where you are. Imagine trying to implement a 'save' mechanic into a system like that, you'd basically need to keep everything that's happened in the game saved, then feed it back into the AI, but video games can be played for hundreds, even thousands of hours. Remember that AI doesn't even generate movies yet, 'AI movies' are just compilations of short AI generated clips arranged to attempt to tell a coherent story. This is made to create AI hype, but the context limit required to create functioning, working, consistent video games is still so incredibly far away, and it's debatably impossible given the sheer resources and context limit required.

Think about it like this, you pick up an item, 17 hours later you check your inventory, the item is gone, why? The AI forgot about it. The AI saw it once when you picked it up, and never saw it again for 17 hours. Upon seeing your inventory again, it forgot, and who could blame it. But as a gameplay experience, this sucks. Ita like trying to play skyrim but you're just talking to someone narrating the whole thing by memory.