>something like the sims where you live in a town/map/world with 80-100 other simulated people, using AI which gives them personalities and can have conversations with the player.

I was thinking along the lines of an advance in interface technology. But you seem to be thinking more about advances in software?

• So in terms of rendering/visual realism, there are some pretty big jumps that are happening right now (e.g. Unreal Engine 5)

• In terms of creativity (if that's the right word?) we're also seeing some pretty big jumps in text to image software. It's reasonable to expect text to video will be progressing rapidly over the next few years as well.

• Gaming was a major driving force behind big advances on processing power. Also reasonable to think it can be a major driving force in the development of AI's... especially if the scenario you suggested becomes super popular.