While it is obviously true that the larger publishers wish to push the industry towards a 'games as a service' model with an online focus, not all of them are engaged in this activity. While EA, Activision/Blizzard, Warner Bros, 2K Games and Square Enix are pushing towards this model, others are choosing a different path.
As previous posters have already mentioned, Bethesda Softworks is still focusing on single player experiences, while for all of their shenanigans, Ubisoft still has single player games as an important part of their ongoing portfolio. Another publisher that is currently working on several single player properties - including new IP - is actually the resurrected THQ under Nordic. Some may not categorize their games in the same space as the so-called 'AAA' publishers (I've always hated that nonsensical arbitrary moniker), but you could argue they are now trying to fill the middle tier of game development once more with games like Biomutant, Fade to Silence, Darksiders III, etc. Middle tier development was largely dismantled when Activison, EA and others amalgamated several studios into factory production lines as they doubled down on a few cash-cow franchises that they could milk on an annual/semi-annual basis. Now I think that middle tier is returning, which is a good thing, and healthy for the industry as a whole.
New development studios are springing up all of the time, joining the ranks of others like CDProjekt, Obsidian Entertainment, Larian Studios, inXile et al, seeking to meet the continuing demand for single player experiences, and while that demand persists, studios would be reticent and foolish not to service it, even if it is perceived as a 'niche' market.
One thing that people fail to take into consideration in these discussions of decline over an extended period, of course, is the fact that the human population has increased exponentially over the past 20 years. There are now far more people who play a whole variety of games, and particular genres have splintered into all kinds of sub-genres while new genres have been created, fracturing the audiences for certain types of games. When you see figures bandied about that a few million people are playing 'game X' online so it must be the best game since sliced bread, that does not mean the target market for single player 'game Y' has significantly reduced. We all have to remember that 20 years ago a game that achieved over a million sales was the exception, rather than the rule. A lot of popular and critically acclaimed titles that are still played today did not sell in huge numbers back then. Some of them were commercial flops.
It is all relative, which is why Square Enix was initially disappointed with 5 million sales of the rebooted Tomb Raider in 2013 and made grumblings that it was a failure. It clearly was not when viewed from the perspective of sales of the previous games. Tomb Raider: The Last Revelation, for example, took 13 or 14 years to sell an equivalent number of units. 'Success' may be measured purely in profits by the game producers, but it was clear that a core audience persisted for that particular franchise over a long period. The same is true of many other franchises. The original Baldur's Gate sold about 2 million units in it's first year. Divinity Original Sin 2 has already sold over a million in less than 3 months, and will likely continue to sell throughout the year. The audiences for this kind of content is still there, and developers catering to that market are proving profitable.
Attachment rates to particular types of games have not really declined that significantly over the past 20 years. On the other hand, some have not grown exponentially either, so I suppose you could argue from that perspective that some types of single player games are not as popular when measured against the likes of World of Tanks, League of Legends or PUBG. However, some clearly are. You only have to look at the long-tail sales of games like Skyrim to see that there are still front-runner cash cows within the genre, and those developers/publishers who choose to continue exploiting that market will probably be glad to see a decline in competition from the likes of EA or Activision because it means a larger slice of that market for them. The market will adjust, as it always does.
Personally I will be continuing to support the developers who make the games I wish to play, no matter what the direction the big publishers wish to take. When EA stopped making the types of games I wanted to play, I stopped buying their games. That's natural market forces at work, and there's nothing wrong with that. Just because the big name publishers have been in the industry for decades does not mean they are the only or preferred option, or indeed relevant to a portion of the game buying market these days. It's okay to move on and find new studios and game creators to support, especially when some of them are producing high quality games on a fraction of the budget of their lumbering corporate counter-parts.
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