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The thing is really that even entry level gaming is getting expensive. I was considering building a pc and everything is expensive, I was going to replace the disk of my ps4 thag I bought used for 100$ and the 1tb ssd costs 150$
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Is $150 a lot in the grand scheme of hobbies?

That'll buy you:

- a set of used golf clubs

- a couple years of fishing licenses, bait, tackle, used fishing rods and line

- a couple really entry level tennis rackets, balls, and court reservation fees

- maybe a used bicycle

- a decent pair of running shoes from last year

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Yeah but that was for my console. For building a entry level gaming pc you can be spending 1000-2000$

The ssd example was to illustrate how much more expensive pc components have gotten just a few years before you could buy it for 50$

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It will be interesting times but I don't think anyone will enjoy a plateau because it's expensive. Even replacing existing hardware is expensive now. Hardly enjoyabe.
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A retraction from the gaming market wouldn't necessarily mean they'd still even produce the current crop of products. I could (and I would argue would) involve a complete shuttering of the GeForce brand, halting current production. On the assumption that Intel and AMD would follow, that wouldn't be an end of upgrades, but an end to the market.
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Gaming is a larger market than Hollywood. Maybe it becomes a distraction for Nvidia, but someone will step in. That might actually be a good thing and why Nvidia wont do that: it creates an under served market in which newcomers can cut their teeth.
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Much of the gaming market is phone games however, not traditional consoles or PCs.

Edit: about half in fact! The rest is shared between the other traditional gaming types.

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Most of the publishers make money on their pc and console games, mobile users barely pay for games although they do pay for microtransactions stuff
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This feels so insane to me, because I don't think I know anyone who plays phone games
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I think we would see an increased push towards cloud gaming. That's probably what Nvidia would want.
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It’s not silly. games use far more hardware than they really need. It also pushes out release dates of aggressive console schedules like ps6 because even if it’s a massive upgrade and you have IP locked into your console, no one is going to pay $4000 to play a game like wolverine.
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We wouldn't be here today if the video game industry hadn't continued pushing the envelope for decades.
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