Okay maybe not dead but are Virtual Reality Games no longer being pushed? I don't really see them advertised and not many of my friends talk about them. I thought they would really be cool and wanted to get involved but I never did find time.
It was tested in the NES days, although indirectly without a headset - the Power Glove and the Glove Ball game was 3D in mainstream. Nintendo tried again with Super FX games like Star Fox, Stunt Racer, and more. Now, Nintendo took a shot at full VR with Virtual Boy. It bombed at launch because of poor execution. Poor support.
At the same time, arcades were experiencing with 3D games, and VR games. Most of the time its these racing games with 3D arcade units with enclosed cones that make you feel like you are in VR. Some arcade games had VR. It was getting better and better, but not quite.
It wasn't until John Carmack created Oculus Quest line. From there, Sony released PlayStation VR, it got popular. Its not at critical mass, but its getting there. It was at this point, everyone else started to get into the market.