How LLMs are Shaping the Future of Virtual Reality

The integration of Large Language Models (LLMs) into Virtual Reality (VR) games marks a paradigm shift in the design of immersive, adaptive, and intelligent digital experiences. This paper presents a comprehensive review of recent research at the intersection of LLMs and VR, examining how these models are transforming narrative generation, non-player character (NPC) interactions, accessibility, personalization, and game mastering. Drawing from an analysis of 62 peer reviewed studies published between 2018 and 2025, we identify key application domains ranging from emotionally intelligent NPCs and procedurally generated storytelling to AI-driven adaptive systems and inclusive gameplay interfaces. We also address the major challenges facing this convergence, including real-time performance constraints, memory limitations, ethical risks, and scalability barriers. Our findings highlight that while LLMs significantly enhance realism, creativity, and user engagement in VR environments, their effective deployment requires robust design strategies that integrate multimodal interaction, hybrid AI architectures, and ethical safeguards. The paper concludes by outlining future research directions in multimodal AI, affective computing, reinforcement learning, and open-source development, aiming to guide the responsible advancement of intelligent and inclusive VR systems.