That's why many EU countries have pretty strict limitations on short term contracts, like how many you can do in a row. It results in a huge reliance on contractors.
The US also has contractors.
Can you explain your thoughts here a bit further? The short term contract can be renewed or replaced with a full time contract. This should provide extra incentive to perform well compared to a full time employee (who doesn't have to worry about either), as long the as the company is a good employer.
As someone in games, this is exactly the road to getting exploited. "If I work harder and really wow them with this feature, I could get full time work!" meanwhile, there were plans to not renew anyone at the end of the project and to lay off full time workers. But you get a convinient carrot to lure starry-eyed devs with
Your "as long as the company is a good employer" is doing Atlas levels of lifing here.
I don't think that's happening in games or tech, but it's been widely observed that Gen Z is less invested in corporate than ever before (or from the boomer's POV: "nobody wants to work anymore").