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People have less spendable money on average than 20 years ago and there are more games and more unfinished or broken games, that are sold for a higher price. Games instead should get cheaper, as people have less money to spend. Your assumption that games used to be more expensive is therefore flawed.
That said, AI generated images, aka fake images and nudes of celebrities etc, are seen as new now. But we could do that with image editing software for decades, just the speed changed. Now everyone acts like as we require new laws, but they are already in place. AI video generation might be a bit more tricky, as one used to not be able to do that without a lot of time and money, but still, it's nothing new and laws are in place. We won't be able to stop this technological advancement and we even harm people by that. If only rich corporates dictate the AI environment, we destroy possible startups, harm citizens and also give evil actors more power, because the later doesn't care about laws, while the average Joe's privacy and other rights are getting more and more restricted.
Regarding AI, it’s not just the speed but the accessibility. Photoshop takes skills that not everyone will learn. AI only requires the skills of a crossed monkey and can be done on anyone at a volume that even photoshop wont do unless you’re dedicated.
As an example, grab several photos of Jo Blow and you can have them nude in minutes. Photoshop, I assume, would require hours for several photos?
I don’t know photoshop, so maybe I am totally off.