Not necessarily game dev, but rather as an embeddable scripting language. There’s also mruby which is even more portable and designed to be more embeddable. My understanding is that in Japan, Ruby is often used as an embedded scripting language the way people might use Lua.
(I don’t have an exact source for this, it’s something that seems to come up periodically when talking about Ruby. Matz mentions it briefly when introducing mruby. I also don’t necessarily think it was conceived for this reason, but rather that over time, it fell into the niche and became influenced by it. But I’m not sure about that, either.)
I can vouch for Ruby's practicality as an embedded scripting language. The first time I used it was in a game engine (which, IIRC, also predated Rails) with a C++ core. Writing the high-level game logic in Ruby was pleasant, and hooking into C++ functions that did the heavy lifting kept it performant.
(I don’t have an exact source for this, it’s something that seems to come up periodically when talking about Ruby. Matz mentions it briefly when introducing mruby. I also don’t necessarily think it was conceived for this reason, but rather that over time, it fell into the niche and became influenced by it. But I’m not sure about that, either.)