Provided you can get the model to land at a place where it’s replying like a well constructed character and not, well, an AI model (hopefully through the input and effort of a talented and well-supported writing team) I don’t see a future where this isn’t where this kind of tech lands. Games are always striving for some sense of realism (some correct away from reality but the driving force of the games industry is in that direction) and while I don’t think absolute realism is a healthy direction for people to aim, realistically realizing characters has a lot of room for unique and incredible games to strive for. Obviously bespoke writing is still the heart and soul of a good narrative but there’s some areas it can’t really cover and I think that tech like this is great for covering that uncharted water
Given that, the voice actors who train these models for moment-to-moment interactions and other stuff that can’t really be easily written for if a game’s content creates a need for it really NEED to be properly compensated otherwise it’s an incredibly unhealthy precedent for the industry. The speed at which this sort of AI develops outstripping proper precedent (legally and professionally) is much scarier to me than some sort of like, ai-overlord type future