Homogenizing races is sadly an ongoing trend in entertainment for various reasons.
1. Some people started to virtue signal by accusing WotC that D&D race X represent ethnicity Y (they could not even agree on which one) and that them being different is racist. Sadly instead of ignoring them WotC caved and thats the reason why suddenly everything in D&D is a multicultural utopia.
2. After WotC drove away all their old role player customers they only survived because Stranger Things attracted a lot of casuals to the game. But they were far less interested in storytelling and role playing and instead only wanted combat and "numbers go up". So they build their characters to be good in combat and nothing else. I literally have been told by them that it is impossible to play an orc archer because they can't get a 16+ Dex at level 1 when races still had fixed ASI.
So with the primary target group of D&D being people who never in their life would play something not optimized WotC caved again and removed all differences between races.
For video games there are additional factors.
3. Motion capturing is expensive, but can easily be reused as long as the skeletal structure remains the same. So for cost cutting the number of races with different skeletons get reused. And its not only animation, also all the equipment and clothes would have to be remade to fit a new skeleton.
That the reason why halflings in BG3 are just scaled down humans with the same proportions or why Blizzard invented a new humanoid dragon race for playable dragons for which they used the elf skeleton instead of making the long existing dragon race playable.
4. Thirst. As mentioned Larian worked hard to attract the Romfantasy crowd and thirsters as that brings the money as the success of the Hojoverse and BG3 shows.
But while some people are ok with romacing something alien or furry, most want conventional pretty human and (tolkien/anime hybrid) elven waifus. And as BG3 made Lariant into the gooning studio as far as all the new players BG3 attracted are concerned, this is what Larian will likely deliver to not disappoint them.
An excellent summary. I just wanted to voice my appreciation!
I think it will take some time for a lot of the damage done to various fantasy settings to be reversed though I am cautiously optimistic that we'll see another societal shift that brings it about. Those who take offense either legitimately or because it is financially beneficial for them do so are a minority. A very vocal one, though they are arguably causing more and more people to wake up and realise that a 'long march through the institutions' was not simply a catchy slogan and was, in fact, a legitimate goal.
I think the only extra point I would seek to tack on to your own is that even many of us who happen to be part of minority groups actually despise pandering and forced diversity, yet we are often shunned and treated as traitors if we push back even lightly.
