I'd call this 3DAssetGen. It's not a world model and doesn't generate a world at all. Standard sweat-and-blood powered world building puts this to shame, even low-effort world building with canned assets (see rpg maker games).
Still, it's a first effort. I do think AI can really help with world creation, which I think is one of the biggest barriers to the metaverse. When you see how much time and money it costs to create a small island world called GTA..
Then, let's say people are allowed to participate in a metaverse in which they have the ability to generate content with prompts. Does this mean they're only able to build things the model allows or supports? That seems very limiting for a metaverse.
Minecraft makes it easy by using big blocks but you can't have detail like that and it's very Lego like. VRChat requires very detailed Unity knowledge. You really need to be a developer for that.
Horizons has its own builder in world but it's kinda boring because it's limited. I think this is where AI can come in, to realise people's vision where they lack the skills to develop it themselves. As a helper tool, not the only means of generation.
But I suppose AI could in theory reach the point where it understand the story/theme and gameplay of a game while designing a world.
But when anyone can generate a huge open world, who really cares, is the same as it is now, gotta make something that sticks out from the crowd, something notable.
But it can be a tool for people with great imagination but not the technical skills to make it real.
Every time we talk about AI people think it will be used only as an easy mode A-Z creator. That's possible but creates boring output. I view it more as a tool to assist in the difficult and tedious parts of content creation. So the designer can focus on the experience and not tweaking the little things.
I know nothing about games and game development, but comments INSTA-sticking up for bigCo is increasingly hilarious to me.
You're right. But the criticism is that it's closer to 2D asset packs than it is to 3D worlds and you're being overly charitable to Meta and underly charitable to the community response.
edit: this is just my over sharing of why i downvoted you. I didn't intent for you to feel dismissed.