I think this will describe a category of games, assuming the tech eventually gets good enough, but I can't imagine this replacing all games. Most people won't want to craft a 10,000 word prompt to layout the kind of game they want to play.

There will still be professional developers who figure out the gameplay mechanics, design style, difficulty balance, progression, and more. Maybe there will be more customization around the edges due to AI, but most players want to grab a ready to go game and get playing.