I've spent way too many years chipping away at genai gaming, here's my 2c.

First, the intersection between someone who understands and cares about genai (and keeping up with the SOTA), with someone who wants to put in the work and compromise to make great games, is slim.

Think about the intersection between a procedural generation/shader programmer, someone focused on making a really fun and compelling game tech be damned. The skills don't really overlap. One requires deep knowledge, technical mastery, geometric thinking, algorithmic optimization, and time in a dark room, and the other requires empathy for humans, brutal iteration, artistic taste, and a knack for storytelling (even if just to sell the player on your game). You basically need both for your "ai game" to even qualify as an ai game. And in an industry that's so anti-ai it's hard to find teams where these two personalities meet and vibe enough to work on a game together.

Secondly, is model performance: quality, speed, cost. I don't think the industry has yet crossed the threshold where generation is high enough quality, fast enough for players, and cheap enough that it amortizes compared to traditional gamedev. You see tons of AI used in development but deploying this stuff to the front lines doesn't really napkin math. That will change though.

Third, game engines are NOT designed for genai. They are decades of optimization for a completely different pipeline, both technical and human: pitch -> publisher -> game engine -> art team + coders -> trailer -> marketing -> release -> support. Adding even simple very, very basic genai requirements to this (say, dynamic texture generation and loading over the network, streaming character dialogue) completely breaks decades of assumptions of how games are built and shipped (e.g. everything mega-super-duper-compressed and loaded to statically allocated gpu buffers). So doing anything new means throwing away large parts of the game engine. And if you pitch not using 70% of the game engine, or making your own, to a 20 year game veteran/studio boss calling the shots in this industry: well, your game will not be getting funded.

This will all get fixed though. The technology jsut came faster than the industry could adapt.

Looking forward to GDC this year!