We have always done this. One main living room and a second living room, or play room as we call it. We never have used a dining room as a dining room in any house.
Both living rooms have sofas, coffee tables, tv in, the difference is the second also holds the play station x box etc etc.
In the second living room we have two two seater sofas, a chaise longue, a coffee table, some tall plants, an antique wooden storage box, which holds all the games,and a corner unit which houses the tv, and games consoles, and a couple of side tables with lamps on, cushions etc.
Pretty much the same in the main room except that one had the sound system,booze fridge etc, side board and no games consoles, no chaise longue and the two sofas are four seaters.
It's lovely in the play room but my husband and daughter use it a lot for gaming. My daughter studies in there. I tend to just use the main room and we also socialise in the main one. When my daughter has friends over they socialise in the play room, whilst we stay in the main living room.
I wouldn't hesitate to do it, and once you have you will always want two living rooms. For us a dining room would seldom be used and we have seating for up to eight in the kitchen. Totally a better use of space for us.
The play room is pale eau de nil ( like a pale greeny duck egg) with cream carpets and squishy ( non shiny!) leather sofas, and is really pretty, so we didn't make it look like a lesser room.