This is not the world's first conversation game; there are many others. The best one I know of is a text game called Galatea, by Emily Short. The entirety of the game is a conversation with an animate statue. It's very complex and pretty interesting and fun to play, and there are many endings. http://www.wurb.com/if/game/1326
They need to show some actual Game Footage... I can't imagine that this is going to be any good. I HOPE I AM WRONG, but if when I ask my cell phone to "Call Mom" and it replies with "you said CALL HOME, is this right?" You know the world isn't there yet...
Yep, You're absolutely right. I too am a bit skeptical about new claims of natural language understanding softwares; However we need to remain optimistic and expect surprises since NLP is still in its infancy.