The model, called GameNGen, was made by Dani Valevski at Google Research and his colleagues, who declined to speak to New Scientist. According to their paper on the research, the AI can be played for up to 20 seconds while retaining all the features of the original, such as scores, ammunition levels and map layouts. Players can attack enemies, open doors and interact with the environment as usual.
After this period, the model begins to run out of memory and the illusion falls apart.
In this case, no. This is just interpreting what the next frame should be by the previous one. Like how the sora videos work, but with input.