They never really recovered from covid. All the big game studios just did live streams of varying quality and then realized that it's much simpler for them to just do that than go to a big conference. They stopped going to the conferences and started just doing their live streams.
It also didn't help that Sony and Microsoft would have their own conferences for their consoles and any games that were releasing on those consoles. Then a lot of the time those games would also be releasing on PC at some point so they didn't need a separate announcement for that they just tell you at the PlayStation/Xbox conference.
Then the studios started to have their own conferences, because they couldn't possibly tell you about a new game in 10 minutes when they could spend over an hour telling you the same stuff.