Many games have substantial co-creative events or storytelling that works very differently as a game (in a good way) than it would using other narrative mediums. There is no question that this kind of expression, appreciation, and co-creatiin is just as much art as any other medium. Plus don't forget, much of the critics raising the definition of art to incredible heights are undistinguished from those who think one piece of art is seminal and another crap entirely through old rich guy PR fights (which the industry and history try to avoid contending with too openly lest the sham be ubiquitously acknowledged). If a commissioned portrait to entertain some noble fuck is automatically art no matter how little the painter cared, intentionally turning out schlock, then a carefully crafted interactive experience intended to (and succeeding to) create joy, aesthetic pleasure, and engagement is at least at that level.

Also just like all other art, the big funded works follow the ruling class' interests in one way or another and most is whatever they decided to buy, meaning it is frequently soulless - and through no fault of the artists. "I made a big-ass lollypop sculpture that's now in the city center" has its correlary in Yet Another FPS and 30 Fortnite clones.