I won't comment on the Indie game stuff, or digital distribution in regards to the number of genres. I do see innovation and maintaining of older genres via digital distribution and stuff over cell phones. However, I did want to look at the large budget titles. I write this to ask if anyone would think I am wrong here. What I am observing is that the number of genres on the top end look like they are shrinking. I am seeing things reduced to a smaller and smaller pool, and genres merging. In the past, you had RPG, driving games, FPS, RTS, adventure games, strategy, sports, puzzlers, fighting games, and others I have missed. Now, what do I see?
* Sandbox games. Basically a map with preconstructed missions and various stuff you can do on the map going from preconstructed mission to preconstructed mission. You can take the games and put them in a different time period, but they still fit under the sandbox genre. For example, yes it is a western, but Red Dead is in the same genre as Grand Theft Auto.
* First-person shooters. Throw in third-person shooter here. Yes, there are some minor differences, but the camera being futher back doesn't mean you don't line up crosshairs and fire, and take cover, while you play Wolverine and wait for your health to regenerate.
* Racing games.
* Music games. This genre has shrunk, but still here.
* RPGs. JRPGs still pop up, but seem to be waning. Western RPGs have seen growth, but it looks like the expansion of sandbox genre, is pushing it increasingly closer to Western RPGs. With games like Mass Effect 2, the fusing of the two genres looks like it is happening more so here.
* Fighting games.
* Linear story driven action-adventure. Alan Wake, Uncharted, and others would fit this. It would seem like this genre, to a larger degree, ends up also appearing as the single player front-end to the FPS genre.
* Sports titles. Still a staple though, but really aren't tops in sales. So long as there are sports fans, they are around though.
In all this, and maybe I missed a few, I am seeing contraction and merging going on here. If I am off, let me know, but I see less diversity now, particularly as budgets increase, in the top titles that get marketed heavily.