In broad terms, yes, that is a bit of an overstatement. But just applied to the top end of the industry, the projects with the multi-million budgets? Then it's probably accurate. More and more are switching to the idea of games a services rather than games as products. Almost reverting to the coin-op days in a sense.
Personally, I think the AAA space going full microtransactions, lootboxes, VGaaS, and abandoning the quality single-player space to lower budgets and smaller studios will ultimately be a boon to the latter. There is also a built-in ceiling. At some point, all the money able to tapped in this way will have been, and the AAA market will collapse. This would, again, open that space to more innovation. It'll suck for the people who lose their jobs but let's be real: there have been video game industry crashes before. There will be again.
This "phase" has been going on for a decade or more with no sign of slowing down or stopping and is only getting worse in terms of how it treats it's customers.
The working conditions won't mean a damn thing until the employees properly unionise to bring crunch under control. Currently, horrible working conditions and high turnover is almost expected within the gaming studio culture.
I am all in favor of them unionizing!

Too bad most of them don't
want unions.
The problem isn't this fad or that fad, it's that publishers are pushing ever more aggressively to make *all the money*. I'm not talking about sustainable profitability like a sensible business, I mean literally *all the money*. They're all trying to have that one game that everyone plays and they'll follow any trend, copy any competitor, cut any corner and use any shady consumer practice to achieve *all the money*.
Indeed. Well, I guess that'll hurt really bad when they finally hit a brick wall.
I tend to agree though that this won't last forever and is obviously not sustainable. The problem is the logical end result in a market crash within the gaming world that'll lead to *fewer* new games being made, not more and the larger companies that survive with probably do so by converting over to pure gambling platforms. Hell, Konami pretty much already has!
Or it'll lead to lots of smaller-budget games. A fun thing about wealth destruction, such as that brought on by a market crash, is that it presents an opportunity for new entrants to come in and grow without being crushed by larger firms.
I will say EA is nowhere near cratering, though. They make insane profits and I suspect that's what is behind this: they have so many sure things in their pocket they don't see any point in gambling. A sadly conservative philosophy.
That's why a lot of them increasingly rely of peer-to-peer hosting. Resulting in very uneven gaming experiences and dodgy matchmaking.
I haven't experienced any of that. Sounds atrocious, though!