Why compete with non-DEI games when you can simply ban them?
https://www.ign.com/articles/tencent-designated-as-a-chinese-military-company-by-us
I'm willing to bet a copy of Veilguard that EA and Activision spent some lobbying money on this, in order for the US administration to do this to one of their most successful competitor. Why entertain the whole discussion of potentially dropping DEI from Western games and replicate some of the success of Chinese studios, when you can simply make your competition disappear?
The kicker? Anything the US bans, its Western allies are forced/pressured to ban as well.
An example of this would be the Chinese brand Huawei, initially designated as an extension of the CCP and banned in the US, right as it was taking considerable marketshake from Apple; a while later, the UK was pressured by the US to halt an entire nationwide infrastructure upgrade done with Huawei hardware.