Videogames don't need color spaces, but they have different compression formats on GPUs, like S3TC, BC7, or ASTC. These things save not just storage, also VRAM bandwidth.
S3TC, BC7, and ASTC are all lossy compressions so they are really not comparable.
A lot of people don't want to play games that look bad - I'd assume that this is going to be a particular issue when a game goes for photo-realistic graphics, only to end with people with orange skin colour on lots of monitors...