Just to be clear, I'm visualizing the usage of world models that can consistently render visual and interactive renderings of a specified world. I think interacting with them will be markedly different than interacting with many text based LLMs (though I don't know, I have never had direct access to one).
I don't think these will create "artist" in any sense, but I do think it will lower the barrier dramatically for people creating games. Most people will interact with it like Lieutenant Barclay interacting with the holodeck, doing little more than wish fulfillment. But I think a few people will be able to interact with it in ways that create art.
In no way am I implying that the net net of AI will be good for humanity as a whole (I think that is too big a question), but I do think the power of World Models will probably result in a far more people being able to say "I have created a game".
I honestly don't have anything useful to say about what LLMs are doing to many human fields. I can understand how frustrating it must feel to see LLMs demonstrate superhuman "skill" (I don't really think they are skilled) at orders of magnitude less cost than a good artist. It isn't just that they don't seem to innovate (only permute), it is that they will literally take even the tiniest bit of creativity and novelty and immediately fine tune and create derivative works on any idea at scale. I can see how that might really demotivate any desire to push the boundaries of art for any human being.