No, memcached is not good for gaming or virtual machines.
Memcached is a daemon (a program that stays in the background and responds to requests) allowing application developers to easily implement memory storage that is shared between separate processes, especially in web applications.
Traditionally, web applications run every individual web request in a separate environment that is initialised at the start of the request and destroyed at the end, and/or in multiple separate processes that share no memory with each other. This allows no "objects" or other variables stored in memory to persist between separate requests. This is true, for example, of PHP.
Memcached is a process that web applications can connect to and use for storing persistent variables, values and objects in memory. The stored data can then persist between different web requests.
This is immensely useful when each web request needs data from a relatively slow storage mechanism such as a database server accessed over a network socket. Instead of each web request causing a new request to the database server, the application may choose to "cache" some of these requests in a memcached instance so that future requests can just access this.
Memcached also has advanced features allowing these shared memory objects to be distributed across multiple servers, and the like.
Memcached needs to be installed separately to the web server (eg Apache, nginx) and application server (eg PHP) for web applications that require it.