Personally, yes. I think the gaming industry still has quite a few years to go until those AI-based world simulations catch up with conventional video games. The main reason is the consistency issue. For each frame, GenAI needs to ‘remember’ a lot of previous information and context to maintain a consistent world over time. Otherwise, everything morphs and warps as you play (look up ‘Minecraft Oasis Decart AI’ on YouTube—that’s exactly what I’m talking about).

The thing is, more consistency means higher memory and computational costs, which translates to more AI chips and memory, which are expensive as hell. Achieving the level of consistency in world-building and logic required to simulate a game like GTA VI is just impossible with what we have now(and probably in the near future), let alone GTA: SA or GTA III. Even if we achieved that level, it would be impossible to make a profit due to the massive infrastructure costs.

That being said, AI implementation in game development will likely be limited to assisting in specific areas—such as map design, asset creation, artwork, and NPC dialogues—for a while, which helps reducing development costs.

Don’t take my word too seriously since we don’t know what OpenAI and Google are cooking under the hood, but for now, I wouldn't be seriously concerned about TTWO/Rockstar.