It's popularity was slowly waning and companies have been slowly pulling back on the marketing at the expo for almost a decade. Over the pandemic period the largest gaming names (Nintendo, Sony, etc) pulled out entirely and created their own marketing events of a similar style that were cheaper and easier to maintain while still accomplishing the same thing. E3 was left as a bunch of disjointed marketing events held around the same time. Geoff Kneighlys events ended up filling in the void it left over this period and E3 just never recovered.

When the pandemic effectively suspended E3, Nintendo, Sony, and Microsoft started producing direct videos. They haven't been interested in going back.

I'm sure someone will do a full postmortem write-up on E3, but with this sort of thing, there's a sort of inertia involved. Once something happens that pauses a regular gathering and makes everyone wonder "why were we doing this again?" there are times the gathering doesn't come back.

E3 was king in the age before widespread social media marketing campaigns. You’d go to those shows to showcase everything to the media to generate hype at one of the biggest events of the year. Those journalists would then go back and write all about it, giving the upcoming projects hype and attention.

Now with social media it’s more effective for brands to run their own campaigns. You can spend millions on an E3 presentation or you can give streamers/YouTubers review copies for free and get a ton of good press.

Once the big companies pulled out it became a lot less attractive to go, then the pandemic seems to have put the final nail in the coffin.

Every year became a competition, and it was unsustainable. Companies could spend millions on their presentation only to "lose" and get their reveals drowned out because Sony announced FF7 or Microsoft got Elder Scrolls etc. On all sides there was a rush to be the winner of the year, and it led to more and more CGI trailers of things 5+ years away just for the big reveal moment. I imagine both Sony and Microsoft would prefer to announce individual games as they come throughout the year, so their reveal is the only big gaming news of the week and everyone is talking about it.