Hah, at least a 100% error in my guess then!
Of course, I know jack about these things, but how would it be a security risk at all even without any fancy encryption? The text-file with the passwords wouldn't be transmitted anywhere, would it? (Or can you make it input the password via command-line or something? I think not, but that would be even more convenient.)
And anyways, I would say that there's not really any need for security even if there was some scenario where the passwords could be mined: I mean, it's just passwords for games is all it is
Thus, certainly my preference would be for the most convenient and hassle-free option: of course, you could make it optional to encrypt them to side-step the issue by providing both options. That's extra work, though, so in the end you should go with the option you feel more like doing
