GPT Chat has demonstrated coding abilities. We have 3D object generation:
https://www.reddit.com/r/singularity/comments/zqnvhb/openais_pointe_prototype_text_to_3d_object/?sort=new

I had someone else say that a 5 year timeframe for AI controlled game design was 'absurd'. Modern game engines are VERY object oriented. Unity/Unreal has you write code for specific objects, and only needs to know how the object interacts (code wise) with other objects. The vast majority of single player games could be written by AI now. All that's missing is integration with Unreal/Unity, longer code output length, and higher quality assets. None of these are impossible and given the economic incentive, it's going to happen. The first company to produce something is usually the one to dominate. And with $200+ billion on the table, there's a lot of incentive.

Full Dive VR/Holodeck? No idea on when that will be. But I bet within the next 18 months we'll see the first VR 'holodeck' of AI handling coding, assets, and characters. It'll be a 5 minute paper type thing showing a techdemo/concept of someone with a VR headset having AI generate a few games from 'scratch'. Possibly like volley ball, generic racer, and generic shooter. And then progressive improvement/better, until it's a full product.