As far as I see it, AI is a tool for doing tasks to aid in development of projects. Like calculators were for math... But there are people that see it as some religious-like next evolutionary step in changing the human experience to create something in different akin to the Ubermensch. The frankenstien complex. I think it can be a cool tool, that will definitely be used to do further harm to humanity in the quest to become "homo deus".

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also, wouldn't completely AI generated games be the matrix?

Not necessary that the game itself is 100% AI generated. You can create a functional narrative. Like a movie that tells the same character story but has new scenes and a different path to reaching the conclusion every time.

However, regarding a game that IS 100% AI generated… yeah it would kinda be the matrix 😅😂

I have heard that rimworld is pretty fun. Uses Ai to taylor the game and characters. Sounds cool on that aspect, I could imagine if oblivion, fallout, or wildlands was like that, that would be pretty cool.

Would there not be some lost incentives? How would they sell a new game if there was infinite replayability