I feel the problem is not the industry but the fanbase. As of the last few years, it's become pretty common to see videogames become target of hatred for "going woke": H:FW's Aloy's "peach fuzz", TLOU2's Abby being too masculine, women not living to the average beauty standard, LGBT characters "shoved down people's throats", character editors decoupling gender and sex or using gender-neutral language, narrative being cringe because it targets millennials (as if older games didn't target young audiences, too)... The industry is going forward, but I don't think the fanbase is ready yet.
Sometimes I think the fanbase is regressing, even. I've seen people lamenting increased "politics" in their videogame, yet saying that MGS or FFVII or Bioshock are their favourite games. Gamers don't even pay attention to what they consume, they merely parrot whatever their favourite influencer says. "Woke" is a meaningless term that gets thrown around whenever they don't like something.
The fact that MS spent an entire decade fumbling the ball, and when it finally got it right and released a game people actually liked, immediately shut down the studio and sold the IP, is still highly amusing to me.
You can't convince me that it wasn't an inside job from someone who either secretly works for the competition, or who actively hates MS and wants it to fail.