What is the appropriate use of generative AI in video games?

I ask this question because I recently started a Kickstarter for an app I’m developing called Infinite Adventure Simulator, and I’ve gotten some flack and pushback because it uses AI. I figured this would be a good place to discuss the issue. There are extreme positions, like generative AI should never be used to create any content for a video game, and it should be used without any constraints or disclosure, but I’d like to offer a view that I think is a reasonable middle ground. I’d be curious what you think of this stance.

I think generative AI should be acceptable when it brings something of value that couldn’t be achieved otherwise. I think it should be discouraged if it’s just being used to replace assets that would otherwise be created by artists or writers (except for something like placeholders in an early prototype).

In the case of my app, the entire premise centers around the capabilities of AI. It’s a roleplaying app where you can enter a custom choice, and the AI will generate narrative and images for what happens next. There are a number of apps out there like this, and it’s basically choose your own adventure, but with limitless possibilities. The main difference with my app is that it has more RPG elements, and as a result I think people see it more like using AI to replace the traditional RPG or D&D experience, when really it’s just a unique alternative that doesn’t aim to replace anything, just as procedural level generation doesn’t replace custom level creation in games. To me, this is a justifiable use of AI, because it wouldn’t be possible to create all of the text and images ahead of time without changing the premise. The technology enables a truly open-ended experience that isn’t possible in an app or video game without it. I understand that this may not be everyone’s cup of tea, but I don’t think it’s inherently unethical.

So what do you think, are there acceptable uses for generative AI in video games? What is the criteria for it being acceptable? If the gameplay relies on the AI to create a novel experience related to it’s premise, is that a good criteria? I also think it’s important for developers to disclose when their game uses AI. Personally, I don’t plan on using AI in my other games, because it isn’t necessary.