Yes and no.
No, in that it’s making plenty of money, there’s plenty of developers, and plenty of new games coming out.
Yes, however, there’s a super-saturation of developers jumping on the bandwagon. While there’s more money in total, it’s being stretched pretty thin so that even devs with great games are basically being pushed out of the market just due to the sheer volume being produced.
This is probably not a long term “death” by any means, though. We’ll probably see a die-off of a bunch of smaller companies and single-dev indie startups when it becomes impossible to ignore the fact that most of them won’t make any profits and it’s not the cash cow they seem to think it’ll be.
When that happens, you’ll see a correction on its own where the more competent developers are able to take advantage of the situation.
Things like candy crush and other such games, however, are not going to go away unless they’re made illegal. They’re specifically designed to make abusive use of the very tiny portion of the population with severe gambling addictions and so on. Less than 1% of their player base makes up for over 90% of their profits, and when you consider that some of them are making millions per month, that should become suddenly very worrying when you realize what that means the average person in that 1% range is paying out.
Basically, regulation of harmful games which are designed explicitly to milk a very small amount of addictive personality customers for unhealthy amounts, will wind up killing that portion of the market off, which would mean fewer devs expecting to be the next big thing, and the market itself would decrease drastically in scale of production… but it would be higher quality games on average.
As it is, it will have a “small” death in that the more people that enter the market, the less sustainable it will be for most of them and you’ll see a crash similar to what happened back in the dot-com crash in the 90’s. It won’t kill off everything by any means, but it’ll change the way the games are made substantially.