"By simulating human-like adaptability and creativity, generative AI can craft experiences that feel responsive and lifelike. Gaming moves from deterministic scripts to truly interactive virtual worlds. This level of dynamism and personalization serves to Deepen engagement and gaming immersion."
Generative AI has been used for rapid prototyping/content creation in VR. For instance this paper:
Chapter Synthesizing Play-Ready VR Scenes with Natural Language Prom...
They used GPT to describe a unity scene for games/VR and then allowed the AI agent to produce directions that could then be parsed to instantiate objects into a level.
Content creation is probably the most straight forward use of generative AI in gaming. Theoretically generative AI could be used for real time content generation (think No Mans Sky generated plants or minecraft biomes/worlds) that may improve upon current randomly generated techniques.