Isn't this still essentially "vibe simulation" inferred from videos? Surface-level visual realism is one thing, but expecting it to figure out the exact physical mechanics of sailing just by watching boats, and usefully abstract that into a gamified form, is another thing entirely.
Why wouldn't it just hook it into something like physx?
Yeah I have a whole lot of trouble imagining this replacing traditional video games any time soon; we have actually very good and performant representations of how physics work, and games are tuned for the player to have an enjoyable experience.
There's obviously something insanely impressive about these google experiments, and it certainly feels like there's some kind of use case for them somewhere, but I'm not sure exactly where they fit in.