A retraction from the gaming market wouldn't necessarily mean they'd still even produce the current crop of products. I could (and I would argue would) involve a complete shuttering of the GeForce brand, halting current production. On the assumption that Intel and AMD would follow, that wouldn't be an end of upgrades, but an end to the market.

The thing is really that even entry level gaming is getting expensive. I was considering building a pc and everything is expensive, I was going to replace the disk of my ps4 thag I bought used for 100$ and the 1tb ssd costs 150$

This is basically already the case in the flourishing indie space, but for different reasons.

The only developers chasing cutting-edge hardware features are the AAA studios and I honestly think a lot of them would just die before successfully relearning how to make games that play well instead of just look pretty.

It will be interesting times but I don't think anyone will enjoy a plateau because it's expensive. Even replacing existing hardware is expensive now. Hardly enjoyabe.

It’s not silly. games use far more hardware than they really need. It also pushes out release dates of aggressive console schedules like ps6 because even if it’s a massive upgrade and you have IP locked into your console, no one is going to pay $4000 to play a game like wolverine.