Some thoughts on the topic, for reflection:-

Videogames are designed to be ridiculously addictive, in fact they're probably among the most addictive things known to man, and yes they are a complete waste of time, in a sense, but so is everything else apart from love and gainful employment, in a sense. It just depends on whether you're enjoying the particular form of pastime you're indulging in.

I don't think the oft-mooted distinction between "real" and "virtual" (in terms of distinguishing a waste of time from time well spent) is all that philosophically significant. It's a bit significant, but I don't think you can put all that much weight on it. Games are no more intrinsically a waste of time than reading a book or watching a movie - what's the intrinsic value of hanging out in a virtual world in your head (reading a story) versus hanging out in a virtual world that's realized for you (to some extent) on a screen, and is more interactive than a movie? Not much.

The problem most people would see is that books and movies aren't designed to be as addictive (to make money). But what about potboilers? Popcorn movies? And on the other hand games are after all interactive and you are to some extent keeping your brain and reflexes active because of that interaction (games have been found to be good for old people) - although here, in terms of brain health, the really important thing is learning new things constantly, so the idea would be to play lots of different games, and constantly be learning new systems, building in new muscle memory, etc., etc., rather than sticking to one game.

There's pros and cons to it all really. I think the really big, important distinction is between input and output, between consumption and creation. I think you need to have a balance of the two in life, and I think that's partly what people are getting at when they think of games (or other addictive pastimes pursued "too far" as one might say) as a waste of time, because in a sense games are much more weighted towards a metaphysically passive form of consumption (you are inhabiting a ruleset and virtual world that's designed and constrained by others). Although here again, some games offer room for creativity too (e.g. games that offer a huge variety of customizability in looks, or games where the gameplay requires thoughtful and creative build strategies).

Ultimately, what people are getting at when they think of "waste of time" is (I believe) that it's ethically wrong (and likely to be dysfunctional) if a person weights their activity (their spending of time and energy) too much towards consuming what others have created, and not creating enough of their own stuff and putting it out into the world (and that doesn't mean one has to be an artist per se, but one can be an "artist" of sorts, on can be creative and bring something new into the world, in anything, even business - raising a family well would also be a creative act in this sense).

Re. multiplayer: I think generally people stick with multiplayer games beyond a certain point more because they've made friends they enjoy hanging out with, that's the real longevity for most multiplayer games.