How so?
I could totally see generative AI add a ton more variety to crowds, random ambient sentences by NPCs (that are often notoriously just a rotation of a handful of canned lines that get repetitive soon), terrain etc., while still being guided by a human-created high level narrative.
Imagine being able to actually talk your way out of a tricky situation in an RPG with a guard, rather than selecting one out of a few canned dialogue options. In the background, the LLM could still be prompted by "there's three routes this interaction can take; see which one is the best fit for what the player says and then guide them to it and call this function".
Worst case, you get a soulless, poorly written game with very eloquent but ultimately uninteresting characters. Some games are already that today – minus the realistic dialogue.