How are Bitcoin generated in Video Games? There are a lot of video games out there which reward the player in Bitcoins or other cryptocurrencies for winning the game or achieving a specific objective. But from where does those crypto come from?

Do the players act as bitcoin miners while playing the game or is there any other mechanism which generates the bitcoin for the game? How does this work? Is the game itself decentralized or they embed the bitcoin blockchain in it?
These games do not actually generate any Bitcoin. No Bitcoin is being mined in these games; that's not how Bitcoin works.

The Bitcoin comes from the service running the game. They are doing something other than running the game that is earning them Bitcoin. They then use that Bitcoin to give small amounts to their users. The Bitcoin is typically earned thread advertisements that are on the website.