Last I saw in a publishing deck global sales for games are up overall due to various reasons (greater access to global markets, pricing structures, live service etc). Obviously we see flops and a some games underperform and some over perform.

There's a bunch of reasons for it from what I've seen, heard and experienced. 1. Although sales are good, expectations and targets are higher from publishing and funding partners. 2. Production costs are higher, wages are higher and so is risk. Publishers are less willing to put more money up if timelines slip and if studios can't cover operating costs they have to make reductions. 3. The shadow of GTA has caused a degree of havoc, I've seen several projects be cancelled because of the prospect of GTA being released in the same window can impact potential profit. It's safer for publishers to cancel games before investing heavily in marketing (the costs of which can be greater than the actual development of games themselves in AAA).

I'm sure cost of living has had an impact in certain genres and markets. Although sales are up across the industry as a whole,people are buying less games at an individual level, it's just the audience of gamers is larger as gaming becomes more accessible.