They have WoW too, but they're working on a new MMO. If that game fails...

I'd love to see the current game industry crash and burn.

The tone would have been entirely different if it was going to be called "fanboyism". I am a fan of Nintendo, but I am also a fan of Sony and the 360 (not necessarily Microsoft). Just because I am a fan, doesn't mean I am a fanboy. There is a difference. 

Which clearly untrue things are you talking about? Microsoft entering the console business because it saw Sony as an afront to the PC and wasn't going to let that happen? The massive layoffs that have been happening? Games failing to turn a profit even though they sell over a million copies? The market growing? Budgets being huge? Low rated games? Games being protected by the Constitution? Bleeding-Edge HD graphics costing more than simple ones? More cinematic games that mime Hollywood in scope and budget? Large development teams, disagreements and development hell? People getting tired of buying uninspired crap with draconian rules set in place? People in '83 thinking that console gaming was a waste of time when PC's could do everything better and faster? How Nintendo helped spur competition by imposing their own draconian rules upon third parties? Nintendo being able to take the hit of an industry crash, due to their large sums of money lying about, and overall reliance on first party software? Sony having financial trouble?  PLEASE. Point out how any of these things are "clearly untrue" or poorly researched. 

Please, tell me which parts of the 38 Studios section were innaccurate. Was it Curt Schilling starting the company with R.A. Salvatore and Todd McFarlane? What about the office space in Massachusetts? How they bought Big Huge Games from THQ? The $75 million loan they received from Rhode Island? How about the fact that the game got mixed reviews and had a buggy demo?  "Decent" sales that failed to turn a profit? The shutting down of the studio and the subsequent lawsuit regarding the money?

I think you are the one that needs to do a little more research on the subject, as all of those things are true.

I was purposefully trying to avoid talking about the negatives altogether, because that wasn't the point of the article. The point was to show what positives could come from a shrinking of the industry. We know what the negatives are, it's all that is ever talked about. I even say "Instead of providing a doom and gloom look at what the future could hold, I want to try and take a look at the brighter side of things, should it happen."

A crash is never good. The industry needs a shake up and needs to change, but a crash isn't the answer. What's needed is innovation and making games profitable without selling 5m copies....

I don't want a crash, but a big shake up to bring studios back to reality would be welcome, and it looks like the fall of THQ hasn't made them realize their danger.

I think part of the problem is the whole idea that the videogames industry is like the movie industry that some analysts(?) started to say years ago and that some studios have embraced. It is not. Movie studios have the theater tickets, the DVD/BluRay sales, the rights to air their movies on TV and the merchandise to get their money back. Videogame publishers only have merchandising, the sales of the game and now the DLCs(which also cost money to make) to get their money back, and that is not enough to warrant the budgets of some games. They need realize that they have to scale back to affordable projects that don't put the Co. in danger if one of them fail.

Ubisoft seems to have understood this as they have stated several times that next gen there will be less AAA games, while others (like EA) have talked about AAAA games and stupid things like that.

Unfortunately, I think that until one of the really big ones fall, and I mean either EA or Activision (one of the japanese ones wouldn't have the same impact on the minds of the publishers) things would stay mostly the same, putting the whole industry in danger. And judging by how the things look now, the one that has more numbers to go down is EA.

There won't be a "crash". The idea that this industry as a whole will or should crash doesn't make sense.

And why do some people even hope this industry "crasesh"? Just look at the top 5 most wanted games people name every month. 95% of these games are mainstream. Most people who want this industry to "crash" buy exactly those games they hope would disappear? Seems so.

I think the videogames industry has never been as diverse as today.

this.

The fundamental idea that a crash would lead to a good rebirth is unsubstantiated.

Games being protected by the American constatution is meaningless on a global scale. Microsoft got into the console business because they wanted to expand into the livingroom because that is what a successful public traded company has to do invest into expansion, it had nothing to do with Sony being an afront to PC lol they had tried to get into the console business several times before the Xbox as well including a partnaship with SEGA and it was only after SEGA folded that MS decided to invest in their own hardware platform. The console market has been shinking for a couple years now, only being offset by the growth in other areas which is why there have been so many layoffs and a refocusing of resources into fewer releases. Dissagreements and development hell has been part of gaming from the beginning it's nothing new, same for major flops, layoffs and huge budgets just look at Shenmu, Daikatana, MAJESTIC, ENTER THE MATRIX, Prey and many many more. Sony's financial truble has little to nothing to do with their gaming devision, hell it's one of their healthier devisions. 

The '83 console crash had nothing to do with PC gaming (which barely existed at the time) it had to do with the market being flooded by cheap cash in and knockoff games, that didn't sell and left retailers unwilling to order new games. The reason that Nintendo managed to turn it around was tight licensing restrictions that limited what publisher could release games and how many they could release each year witch prevented the market being flooded with so much shit you literally had to dig through a giant (bargin) bin of trash to find a half decent game. In other words Nintendo created the current trend of fewer higher budget releases that you are saying would be good if it ended. Of course after games got to the point where one person could turn out a peice of shit game in 4 months and dump it into the market the tight licensing restrictions lead 3rd party publishers to abandon Ninetendo and they have struggled to get them back ever since. 

38 Studios is a complex issue, they were founded by Curt Schilling but not to make Kingdoms of Amaluar: Reckoning. You see Reckoning was a game that Big Huge Games was already being made for THQ before they sold the studio that was later repurpoused into Kingdoms of Amaluar, it was a middling success. But that was not the issue you see 38 Studios was making an MMO, and as those are the biggest and most expensive games around need a lot of staff and money to make. Of course it all went wrong as Curt Schilling missmanged the company into the ground with extravagant employee bonuses, hiering everyone they could to fill their quota, changing major game design at his whim, micromanaging pros when he had no clue about game development etc. As it was his passion project he refused several offers for publisher to accuire the game as they wanted to take him off his position, which meant that they never found a publisher to invest money into the game. It was a disaster of missmanagement by someone who new nothing about game design or running a business trying to manage the development of one of the most complex and expansive genres around as a first game, Rekoning was a drop in the ocean. 

there is a very good article about it here http://www.bostonmagazine.com/2012/07/38-studios-end-game/ that goes into detail.

You can't ignore the fact that the negative reprocussions would prevent most of the so called benifits that you claim. A crash wouldn't mean more of anything it would just mean less. The smaller innovative projects by smaller studios with small budgets exist now but the death of the AAA scene would negativle impact that scene as well as a lot of the investment, technology, training and install base/public attention relies on the AAA scene. Times have changed and they will never go back to how they were in the past. 

A industry crash is the equivalent of the engine of your car breaking down.

Some people would fix the car but others usually just get a new car. If the industry had one, the best possible scenario would be gaming living on as mobile gaming because consoles and probably one of the major publishers short of a Super Mario type crossover success to revive the industry would be dead and regulated to complete niche.

The industry needs to change, developers and publishers probably should all start focusing less on budget bursting graphics or media marketing for titles that are ripoffs of current market leaders and more on making unique fun experiences that can become their one Triple A products (Skylanders and Guitar Hero/Rock Band are probably the best examples). Despite the increase cost for development on HD systems, it isn't just that which has slowly lead several developers into bankruptcy. Bad decisions and management usually is what kills studios, if not corporate politics like with Lucasarts.

A crash will be bad no matter how you look it. However some big dogs need go down in order for other big dogs to finally realize things are getting out of control. We already saw one big guy going down (THQ), lets see which one is the next.