I do not lie to students. "Honesty is the best policy" really applies, and I've always thought that if you're going to lie, it should be about something of near life-and-death importance.
Consequently, I ignore those who say "let them dream", by making sure that students have a chance to understand reality. I think this is especially important with millennials, who have often been told from day one how special they are, and then are shocked to learn in the real world that this isn't so.
The first day I repeat something that famous game developer of olden days Chris Crawford said at an NCCIA conference a few years ago: There are 10 times as many people wanting jobs in the game industry as there are openings. (10 is an illustrative number, of course, who knows the actual numbers--more than 10, I'd bet.) Consequently, even if you're hired, you'll not be treated well, because there are always lots more folks wanting your job. Working conditions are often poor and hours are long. Many people leave the industry within five years. (But often end up in simulations and training industries.) Nonetheless, Chris said, feel free to tell your students this, because they'll still want to "go for it". And that is my experience.
I also tell students in game design classes that there is virtually no chance they will be hired right out of school to design games. Who is going to spend a lot of money producing a game designed by a person with no industry experience or track record in design? Nobody who stays in business for long! However, at my school it is quite possible for a good level designer to be hired straight out of school for that purpose, because we have many game studios and manufacturers in the local area. Where there are no local companies, I doubt that enough people to say so will be hired in any kind of game or level design capacity straight out of school.
"The worst form of inequality is to try to make unequal things equal." -- Aristotle
"Always do right--this will gratify some and astonish the rest."Mark Twain
"A designer knows he has achieved perfection not when there is nothing left to add, but when there is nothing left to take away." Antoine de Saint-Exup'ery
"Not everything that can be counted counts, and not everything that counts can be counted." Albert Einstein
"Make everything as simple as possible, but not simpler." Albert Einstein