Its survived much worse.
https://en.wikipedia.org/wiki/Video_game_crash_of_1983
PC games went into decline during the 2000s. And I'm sure COVID is paying it forward into the franchises thanks to all the delays and consolidations. They're all happening for similar reasons - excess consolidation in the AAA market, lots of really crappy knock-offs filling up the retail space, and the model for the industry being incompatible with the popular demand among players.
Just look at Blizzard, a studio that made its bones on RTS in the early 90s. They haven't released an RTS in over 13 years. Bioware, a studio that pioneered third-person TTRPG-style adventure games, has lost all sense of direction with its foray into MMOs and eroded by staff turnover. Now Larian is eating their lunch on the very title that put them on the map. And then you've got EA, which has been devouring and destroying studios since the early-90s (RIP Origins, you'll always have a special place in my heart).
There's still plenty of demand for video games, and anyone who tells you otherwise is lying. But we've been in a quality tailspin since at least the mid-'10s. Enshitifcation has taken its toll.