Comment by trod1234

I think you've misunderstood some critical aspects of that demo.

The growth numbers don't show what people attribute to them. That timeframe aligns with increases in discretionary spending, and also QE/loose financing requirements. The boom bust cycle can easily be explained as a result of debt financing, and leveraged buyout.

The bust part of the cycle is what you get naturally when you finance poor investment choices.

This is the same Atari story, all over again. Those spends also don't appear to normalize against inflation.

Main console manufacturers also require additional costs which the developer must carry if you want to develop games on those platforms, and the industry has been devoid of anti-trust for decades, and exploitive of its workers (all which increase costs), and regulatory is paying much closer attention to deceptive business practices, with addictive design in some places being comparable to civil battery. The elements for this type of design are scientific, and are based in early last century torture findings.

What you naturally get is overinvestment, shortfall in delivery, stark losses, and a burning down of your supply logistics, where they stop carrying your goods, and won't carry your goods at any price (even on contingency), on top of the rising costs. In other words, you have benefits front-loaded, followed by diminishing returns, followed by outflows exceeding inflows. This is Ponzi, followed by deflation leaving the market chaotic.

Cooporation between large platforms and developer monopoly has shrunk the market over time as well. Extracting revenue in a race to the bottom, with fixed barriers to entry concentrating marketshare.