I watched the first round with Watson and didn't really get the point. I mean, they were feeding it a text file of the question (i.e., it was not hearing the question but reading it) and then searched its database for the answer. Yeah, this is a nice step in AI being able to comprehend a written language, but nothing I think will change the world any time soon. Now, if it was hearing the questions and understanding...then I would be impressed.
I mean, that type of advancement would soon lead to HAL-like AIs.
Still, I suppose having an AI read and 'understand' text (albeit, in a very limited way - from the little doc shown before the show started, it seemed to me that Watson merely makes associations between certain words based on a set of algorithms) could come in handy in game design. Imagine the possibilities for advanced diplomacy in 4X games!