I don't think Video games are Good for CPA advertising, however, CPC can be a good advertising tactic if you have a related product. For example, if you have a game that you want to advertise, you can try advertising on video games.
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You're right, placing an ad in a trending game will definitely bring more conversion. But it's going to cost more to advertise on trending game. Generally, placing an ad in video game is great method of advertising.i also agree with you that it is a great method of advertising, but it has to be well thought of an planned, let's say if you are advertising an in game purchase for a trending game you would have more conversion.
That's trueIt is more like Youtube where you can see ads in between and I see many online games and app based games use that model but I doubt if big companies will do for big titles because gamers can be unhappy with ads.