This question gets asked with a hidden assumption baked in: that game development is one job, and AI either takes it or doesn't. It isn't one job. It's dozens of overlapping skills, art, code, sound, design, production, marketing, and AI is affecting each of them at a completely different speed.
The part that's actually shifting
What's changing fastest isn't "developer gets replaced by AI." It's "the cost of starting a game project drops toward zero." Someone with a strong idea and no art or code skill could not previously ship anything. Now they can produce something playable in a weekend. That's not automation replacing a job, it's a new kind of person entering a market that used to have a much higher floor to enter.
What that actually does to the market
More people shipping more games means more competition for attention, which was already the scarce resource in gaming, not development capability. A flooded market of AI-assisted games doesn't make skilled developers less valuable, if anything it makes craft and taste, the things a generator can't supply on its own, a sharper differentiator, because the baseline of "technically works" stops being impressive.
Where skilled developers get faster, not obsolete
Experienced developers using AI tools aren't being replaced by them, they're the ones getting the most leverage out of them, because they know what "correct" looks like and can catch a generator's mistakes instantly. A junior developer using the same tool without that judgment ships more bugs faster. The tool amplifies whatever skill was already there; it doesn't substitute for it.
The honest prediction
The jobs most exposed aren't "game developer" as a category, they're the specific tasks inside development that are repetitive and easily checked: boilerplate code, placeholder art, first-draft dialogue. The jobs that get more valuable are the ones requiring taste, judgment calls a test can't verify, and the willingness to throw away nine AI-generated options to find the tenth one that's actually good. That was true before AI too. It's just more visible now.