Special Note: Please note that this scenario is meant to be read as entertainment, not as an accurate prediction of the future. Also note that the viewpoints and opinions that may come across in this scenario are not necessarily the viewpoints and opinions of the author.
Nintendo, one of Japan's finest exports, caused panic among conservative Americans in the 1980s who said that we shouldn't be paying $50 per game so that the Japanese can create violent games to satisfy the adolescent male palate. In the North American offices of our cherised video game companies, we don't have designers, we have censors. They "program" stuff to make it look appropriate for Western culture. All the programming is done beforehand by the Japanese staff.
The first quarter of 2038 would signal the beginning of the end for the PlayStation/Wii/X-Box line of video game consoles. Realizing that people would rather surf the Internet, watch reality television, and play emulator games instead of spending money on their games, all the video game companies started to lose money quicker than in the North American video game crash of 1983. Online gaming and social media gaming has become more and more popular, replacing traditional gaming with consoles. Many online games are available for free (with extra charges hidden in the game for better gameplay experience) or for a very low price, and many could be bought online through Google Play, Microsoft Store, or the App Store. The games being created online started out with simple, cheesy graphics but then eventually become as extravagant as the console games. These games are played more on smartphones and tablets instead of the traditional console.
Some games were immune to the Gaming Depression. An example will be The Sims franchise since the Sims are different than your typical video game and the concept of the game is timeline. By the beginning of the Gaming Depression, the Sims were continuing their franchises with The Sims 6 or The Sims 7 along with their numerous expansion packs and various add ons. This will make The Sims one of the longest running and most successful gaming franchises of all time, and could withstand a gaming depression because of the innovative content. By the time of the Gaming Depression, The Sims will become almost very life like with the possibility of VR interfaces and AI features.
As video gaming used to be a popular past time for children and young teens, the demographic is starting to change. By the time of the Gaming Depression, the average age for a "hardcore gamer" is around 50-70 years old, which makes video gaming a "geriatric activity" that would be not cool for the younger generation. As of 2017, we are currently seeing a similar effect with traditional TV with the average age of broadcast (and even cable) TV is reaching over 50 while the younger generation is streaming TV online with Hulu, Netflix, and YouTube. While the younger kids see their parents and grandparents play video games, there will be a natural rebellion. This is similar to the rock music rebellion as Baby Boomers are the ones that did at one time "youthful and rebellious" activities such as playing electric guitars and listening to rock and roll. By the late 2030s, many of the classic rock greats will had passed away or will be at a very old age, nearly 100 years old. Rock music will be very similar to the many big band and Rat Pack era greats around the year 2000. The death of Frank Sinatra in 1998 signaled "a nail on the coffin" for the Rat Pack era while some major classic rock great, let's say the death of Paul McCartney or Mick Jagger will have a similar effect to rock and roll.
Anti-video game activists were also contributing to the Gaming Depression as well. Many studies were being conducted with the effects of video games being negative which reduced the sales of video games. Many of the studies were based on the increase in violence, obesity, and social isolation, along with making certain mental illness such as ADHD and autism more severe.
The Worldwide Television Ban of 2040 also impacted the video game industry as well. Most video game consoles are connected to televisions and related materials, as the criminalization of television has almost essentially created a "criminalization of video games" as well. TV commercials has influenced the advertising revenue of video games and video games that are connected to TV sets make enormously larger revenues than internet and smartphone/tablet games. Many gaming consoles such as the Playstation will enable you to access programs such as Netflix which will make you be able to watch TV on the devices.
This would be entitled the Gaming Depression (also known as the Video Game Crash of 2038 to the hardcore gamers who were born prior to 1983). Facebook Nintendo will become a home appliance company becoming very popular by former hardcore gamers. Sega would start making slot machines and divert their gaming to the adult casino world. Sony would divert their game making staff back into making new TVs and Blu-Ray players (in addition to building indoor theme parks to compete with Sega's in Dubai). Most of Sony's exports will go to Puerto Rico, Antarctica, and some parts of Russia where the TV ban was not affected. Apple would eventually acquire the people who made Dance Dance Revolution and use their technology to get people to learn how to dance the traditional dances (and make them fun at the same time). Two years into the gaming depression, PC sales would skyrocket and the sales of netbooks (which never took off in the first place) would jump up considerably. Atari would start to create hybrid vehicles mainly for the American/Canadian market and Activision would start making educational materials for the K-12 schools.
By the year 2040, video games are no longer mainstream as a result of the Television Ban of 2040 - with its role being long replaced by world beat music, interactive anime, orgasm drugs and smoking water cigarettes for the post-rock generation. The teen pregnancy rate would skyrocket by 8000% as a result of former gamers becomes sex addicts and reckless womanizers. Being a "typical adolescent male" of the early 21st century just would never be the same ever again. Only the freeware and unlicensed gaming communities continued to operate after January 20, 2038, usually from lesser known countries in the world such as Fiji and Tonga. Facebook Nintendo's Oculus VR would break even during the Gaming Depression, passing the muster as "educational simulation software." Obesity rates would finally start seeing declining numbers after decades of increasing activity. The "Play 60" programs would finally be in full force as the increasingly lackluster quality of video games finally forces children to "unplug themselves from the consoles" and go outside to a world that is superior to the video games of the mid-2030s and late-2030s.
Parents will find a way to get children off the medication that they had to take in order to halt the bad medical conditions they developed while obese. They will result to Dr. Oz's naturopathic cures to eliminate their children's juvenile diabetes, high blood pressure, and osteoporisis without expensive pharamaceutical medications. Seriously, teens have been known to acquire brittle bones through drinking diet soda.
The West Coast of North America will briefly be in a panic as laid-off game designers go through their unemployment insurance while they get re-trained to design business apps and educational software instead. Kids will learn to play baseball again in the traditional manner. Many young people will revert to listening to music and playing musical instruments as they did before the rise of video games. This will add a surplus to the music industry, which was on the decline since the turn of the 21st century because of a drop in album sales. Instead of buying video games, people will begin to buy albums. Reading books will become more popular since many people rather game than read a book, unless they are related to gaming. Bird watching groups and bowling leagues would see an 120% increase in membership about 5-10 years after the Gaming Depression begins. Gym memberships, swimming pools, and YMCA memberships rise over 500%. Virginities will be lost almost overnight and the birth rate will see a slight rise for the next 20 years; delaying concerns about "lazy young people not wanting to have babies." Marriage rates will increase as young adults are more likely to get married and become mature adults instead of playing video games. Many young women would rather marry a "real man" instead of an "immature gamer." Professional sports will have to find other venues to promote their superstars. People who want to emulate their sports idols will have to practice their game and hope to get drafted. It won't be like playing career/road to the show/dynasty mode on a video game. People will have to get out of the house and exercise with their friends. Interest in fantasy novels and other geek culture makes a major decline as many parts of modern pop culture were based on video games. Traditional "alpha male" interests such as automobiles and sports will once again be the popular hobbies instead of the "childish" video game, anime, and comic book interests. While geek culture has become more accepted in the late 2000s and 2010s, (think the rise of Superhero films, internet memes, TV shows such as Game of Thrones and The Big Bang Theory, Star Wars franchise comeback, etc.) the gaming depression has made geek culture a thing of the early 21st century and a thing of the past. This may reflect as the western world will move back to a more traditional Agrian-Industrial economy instead of a service economy. The Gaming Depression also created a comeback with religion with younger people. Instead of playing video games, young people spend more time studying their religion and attending their local religious institution.