Real-time generative game engines represent a paradigm shift in interactive simulation, promising to replace traditional graphics pipelines with neural world models. However, existing approaches are fundamentally constrained by the ``Memory Wall,'' restricting practical deployments to low resolutions (e.g., $64 \times 64$). This paper bridges the gap between generative models and high-resolution neural simulations by introducing a scalable \textit{Hardware-Algorithm Co-Design} framework. We identify that high-resolution generation suffers from a critical resource mismatch: the World Model is compute-bound while the Decoder is memory-bound. To address this, we propose a heterogeneous architecture that intelligently decouples these components across a cluster of AI accelerators. Our system features three core innovations: (1) an asymmetric resource allocation strategy that optimizes throughput under sequence parallelism constraints; (2) a memory-centric operator fusion scheme that minimizes off-chip bandwidth usage; and (3) a manifold-aware latent extrapolation mechanism that exploits temporal redundancy to mask latency. We validate our approach on a cluster of programmable AI accelerators, enabling real-time generation at $720 \times 480$ resolution -- a $50\times$ increase in pixel throughput over prior baselines. Evaluated on both continuous 3D racing and discrete 2D platformer benchmarks, our system delivers fluid 26.4 FPS and 48.3 FPS respectively, with an amortized effective latency of 2.7 ms. This work demonstrates that resolving the ``Memory Wall'' via architectural co-design is not merely an optimization, but a prerequisite for enabling high-fidelity, responsive neural gameplay.