You see the same with photography. Back in the 70's I had a small darkroom and a mid-level camera. Again the more you spent the better quality you got. Now most people are satisfied with their Smartphones for taking pictures, or you spend significant more money for a high-end camera. There is a continuous improvement from high-end to very high end but it makes little sense to buy a $300 camera these days.
For video games, you either use your games on your phone or tablet, or splurge on a system like Xbox or Playstation. Same for watching television shows and movies. You even see this phenomenon in cars where even the low-end models have a solid baseline of digital systems and safety. There are still some things you can't digitize, like wine, where you still have a continuous improvement spectrum.
So what's the problem, after all everyone now gets better quality at lower cost, whatever the price point. Let's go back to the music example. You'd start off with a cheap system and then as you earned some money you'd splurge on a better needle and get an improvement in quality. And you'd keep improving until you reached a high-level sound.
Now many people would never take that step from an iPhone to vinyl because it requires a large investment to get any improvement in sound. They'll never find out what they're missing.