Gaming is fine. Remove AAA from the equation, and current gaming is perfectly fine. Indies are plentiful and offer a great experience. Even lower-budget games from larger companies are fine without being plagued with every horrible practice (e.g.: microtransactions).

Also, the past 4 decades of games are still available. Hell, I would probably need two lifetimes to play all games in my queue list.

It may not be the infinitely profitable industry that attracts the likes of Microsoft, and that is a good thing. In fact, I view Microsoft failing in gaming as a hopeful sign for the health of videogames.

What? Both PC and mobile markets are growing by any reasonable metric, and consoles are propelled by stellar Switch 2 sales.

The gaming market is ripe with money, it is total failure on Microsoft side that they failed to capture any of that. Xbox is on life support, and Windows platform tax is captured by Steam, where Valve funnels it into Linux to make its own platform.