Demand IS high, but it’s not exponential. Games are getting cancelled because they won’t generate billions of dollars. The profit floor required by PE is now too high; that doesn’t mean there’s no profit.
As to the rest of it:
@jdklose.bsky.socialIf the industry stopped producing the games consumers demand there should be plenty of opportunities for new studios producing easy to sell games. Where are they? And why is there still a flood of games exceeding demand if “the industry” cancels games despite demand?