Both are valid considerations, but I find the large shift to time spent on social media apps a much more compelling argument.
Indie games are part of the industry too, so I don’t think they’d be losses in accumulated industry revenue. The small and niche indies probably don’t have much of an impact on the market as a whole.
I also think the big titles largely marketed towards the general people and casual gamer. And I have to assume that still works the same way. They buy the popular marketed title, or on their console digital store. They don’t care as much about classics or indies [outside of the store’s popular titles].
This may be the next big sabotage of society.
Algo-driven unregulated social media pushed negative views, division, misinformation, while opening the platforms to manipulative content producers and connecting positive as well as negative influences (like finding communities of extremism).
If unregulated AI interfaces get pushed to people, they will not critically verify, but be confirmed in their own and the AIs biases, without any obvious indicators that this is happening.
Good thing we see some kinds of positive regulation. Like them pulling this model, interfaces adding disclosures of AI and uncertainty, and regulation by law.