A retraction from the gaming market wouldn't necessarily mean they'd still even produce the current crop of products. I could (and I would argue would) involve a complete shuttering of the GeForce brand, halting current production. On the assumption that Intel and AMD would follow, that wouldn't be an end of upgrades, but an end to the market.
Gaming is a larger market than Hollywood. Maybe it becomes a distraction for Nvidia, but someone will step in. That might actually be a good thing and why Nvidia wont do that: it creates an under served market in which newcomers can cut their teeth.
Much of the gaming market is phone games however, not traditional consoles or PCs.
Edit: about half in fact! The rest is shared between the other traditional gaming types.
Most of the publishers make money on their pc and console games, mobile users barely pay for games although they do pay for microtransactions stuff
This feels so insane to me, because I don't think I know anyone who plays phone games
I think we would see an increased push towards cloud gaming. That's probably what Nvidia would want.