Exactly. Maybe a better comparison for AI would be if you just paid someone in India to make the game from your spec for you. It will cost more than AI tokens but you absolutely could do it. I think most people would understand that isn't in the spirit of the competition.
It's happening everywhere now. A lot of communities are being flooded with AI apps now, e.g. Home Assistant has an endless stream of "I made this cool new dashboard" and it's actually just what AI shat out in an afternoon. Don't get me wrong, it's great that if someone wants a custom dashboard they can have a bespoke one made for them for free and with no coding knowledge, but for people who enjoy making things as a hobby it adds no value and makes their efforts feel somewhat meaningless.
It's not just tech either. Mathematics is being flooded with AI proofs of problems that people have spent their entire lifetimes trying to crack. Artists had it hard already with the number of people competing to sell their paintings and music and comics and books, and now the bar is even higher thanks to AI being able to churn that stuff out all day at very low cost. It doesn't help that some of the people asking AI to make this slop consider themselves to be accomplished artists and want their work to be treated with equal respect.