Adventure games seems to be a segment that is especially prone to boom and bust cycles. This has to be at least the third major collapse, following Infocom and LucasArts. Even when well executed, the formula is hard to keep fresh, and the emphasis on story and writing leads to generally poor replayability. Particularly now, in the youtube/twitch age - most of the enjoyment of these kinds of games is watching the stor…
But in general, the crux of the matter is that games are still adapting to internet-age business models -- selling a title for $30-$60 with higher and higher development standards has been unsustainable for some time now. Going F2P is also hit or miss: not every game can be a League of Legends, and 99% quietly die running deserted servers with a tiny tiny fraction of the player base they may have had in their peak. It's the reason indie games have risen in popularity -- AAA studios are now just hoping to arrive at a hit franchise, and then furtively milk it for as long as they can, still fully aware they're one bad title away from biting the dust. Meanwhile thousands upon thousands of indies throw their life in the pool and a few good games reliably come out. Few hear or care about all the indies that disappear and return to their day jobs after a failed 5-year game. This model works fine for gamers, and making games is quickly becoming a cottage art industry like music or films - yes there are some studios churning out blockbusters, but mostly indies struggling, while consumers just get a glut of stuff at low costs. The unstable part is that most game devs can easily abandon the art for tech jobs with gobs of money, unlike musicians and (most) filmmakers, so it's possible the entire industry could die out if we enter an era of uninspiring games for too long.