Two thoughts about that:

First, as far as I can tell this isn't a settled issue yet. Given the ambiguity, I don't think it's unreasonable in a computer game to use the extermination idea, and extend that to competition between sentient aliens. It's a case where a "fun" idea might trump accuracy, especially since the experts still aren't sure about this.

Second, I don't think it's a big stretch to call territorial displacement or genetic dilution "extermination," even if it didn't always include overt violence. We pushed them out of their territory to a place where they couldn't survive, or diluted their gene pool with interbreeding (which only happens if the dominant race is succeeding in other ways), or we just bashed 'em on the head because we didn't like the way they looked. I guess what I'm saying is that "extermination" can proceed by other means than pure violence.