I'm not sure I understand the point you're making. I'm trying to say games aren't becoming niche any time soon. Of course I'm going to use the umbrella term to say that? Yeah there are many sub-segments, arguably many more than say movies, but that only strengthens my argument. It can cater to so many different sort of audiences.
> more and more people will realize games are a waste of time for them and go on to find other hobbies
This is what I'm arguing against, more and more people will realize exactly what sort of games they like and home in on that is a much more likely scenario.
And just in case your point is that games used to be more engaging and fresh, well, Indie games exist. So many games are doing many new things, or fusing existing genres into something fresh. There's a lot more variety to be had in games than most other media.