F2P/mobile games are monetized through Wales, but they're only willing to spend if there's enough incentive (e.g. prestige). That's not given if there's no F2P player base, because the base game would be too expensive.
IMHO the best way to go about is to vote with your wallet. There are plenty of worthwhile games where you don't have to be a whale to be successful.
The idea of such regulation is to stimulate the business to move back to normal models.
In the Netherlands this is already working, Diablo immortal is not available there. It's a small market but once the whole EU does it they won't have a choice but to come up with something more reasonable. Win-win.
It's more likely that when incentives change, the whole customer base changes.
The current system of preying whales to pay for games has negative externalities for gamer's who don't have addiction. Playing is cheaper, but people play less games because addictive spending mechanics is affecting where the game development money goes.
Regulation would create incentives to make games that are expensive because they are so good.
It's not about the VPN, it's the payment method and App store setup that determines if you can install the game. Regulation does not have to be watertight. It just needs to work well enough to drastically reduce harm.
Lost Ark is in the top 3 of all games played on Steam and has been since it released this February. The game was 3 years old when it launched in NA/EU though - it had been out for 3 years in South Korea, 2 years in Russia and Japan. This is a game that ended up being very popular, but if nobody had bought the NA/EU publishing rights then the only way to play it would've been to play on the Russian, Japanese or Korean servers.
It's pretty normal for online games that come from Asia to not cater to the western market. I don't see why they wouldn't do this even more if we get additional regulations on games. And even when they do cater to the western market the priority is going to be North America, not Europe. Europe's almost always second class in these. (And when these games are brought over they're often Americanized/localized.)
PS Lost Ark is banned in Netherlands and Belgium too.