It would result in fewer online games that stop working altogether when the publisher wants to stop it.

All the publisher would have to do is to create a "mini self-hosted server" application and provide it and they would follow the law on this.

It's really not that complicated. Not "free", of course, but it's not exactly expensive either if you plan to do that from the moment you write your first line of code.

And would that really be a bad thing?...

90% of games have no online conponent, and run in perpetuity after purchase. The multiplayer games usually ship with a server binary you can place on any machine you control.

This only affects AAA game studios that produce micro transaction slop and live services. The exact same that are lobbying against any sort of regulation.

The gaming industry will be fine.