For some reason I feel really saddened by that. The management at Lego are the custodians of a significant cultural artifact. Really seems like they've lost their way.
LEGO went through a period of financial difficulty around the turn of the century. The pivot to more themed and licensed brand sets is one of the things credited to turning around the company. They still sell the basic stuff but they can’t survive on that alone.
I imagine video games have eaten up a lot of the market for traditional toys like Lego.
Probably, but Lego does have their own video games that do pretty well, and probably motivate some people to buy the real thing.
Helps that the Lego video games are all surprisingly very good - far better than the standard for most cash grab themed games