My wife studies multi-modal literacy as part of her PhD studies. She was, at one point, staunchly against letting our young daughter play too many computer games, but as a result of her studies has done a complete 180. We monitor what our daughter is exposed to, for the most part, but we find that introducing her to games that stretch her skills in literacy, music, logic, etc. has been really beneficial. The result? She was reading at 3 years old and reading well by 4 years old. She just turned 5 and is into chapter books. Is this result completely due to her game playing? No. But the games have definitely helped.

tl;dr version: in my opinion, based on experience, the right kind of games will help literacy development