In my opinion, the industry as a whole will not die, but unless the consoles' digital stores get competitive enough to face Steam, PC will replace the consoles. You can get tons of games on Steam for a ridiculous price. I saw the whole Sonic and Tomb Raider series (ALL of them, including Generations and TR 2013), for $10 each, if I'm not mistaken. Steambox will most likely change everything.

That's what I think, honestly.

It won't crash. As always, some companies will die, others will survive and a few will thrive when they discover the next big thing.

What I see happening in the next gen is a rapid movement towards digital distribution, subscriptions and streaming. The old retail model where gamers pay $60 for a physical game will disappear. Publishers will push DLC, micro-transactions and smaller blocks of content instead of a single huge title.

Here's some devs and publishers that died since late 2006, and some of the things they are known for.

*38 Studios - Kingdoms of Amalur

*Big Huge Games - Rise of Nations

*Bizzare Creations - Project Gotham Racing

*Black Rock - Various Racers

*Blue Fang - Zoo Tycoon

*Cavia - Resident Evil on-rails shooters for Wii

*Cing - Little King's Story

*Eidos - Tomb Raider, Hitman, Deus Ex

*Ensemble - Age of Empires

*Eurocom - Dead Space: Extraction, 007 games

*feelplus - Parts of JRPG's like Lost Odyssey and Star Ocean: The Last Hope, Mindjack

*Flagship - Hellgate

*GSC Game World - STALKER series

*LucasArts - Star Wars and Adventure games

*Midway - Mortal Kombat, NBA Jam

*Pandemic - Star Wars Battlefront, Mercenaries

*Phenomic - BattleForge

*Pi - Rock Band ports, Call of Duty assisstance

*Pivotal - Conflict series

*Radical - Prototype, latter Crash games

*THQ - Saint's Row, Darksiders, Homefront, Warhammer, etc.

*Realtime - Crackdown

*Sony Liverpool - Wipeout series

*Team Bondi - LA Noire

*Transmission - Heroes over

*Zipper - SOCOM series

But of course, the rise of Rovio and Angry Birds cancels all of this out. Never forget it!

Well, that's an interesting question, but tbh I don't follow the financial ups and downs of most publishers/devs too closely, apart from Nintendo, Sony & MS (they should all do okay), so I really wouldn't dare say (although apparently Capcom isn't doing so hot nowadays). Would you wager any guesses?

A lot could seem to be doing okay, but things can change for the worse very quickly, especially with budgets ballooning out of control. This coming gen, situations where a few games fail, or even just one big game, could probably very easily cause devs/publishers to go out of business.

A sad by-effect of this is most likely going to be publishers playing it very safe and going with the tried and true, resulting in much less fresh and original concepts, thus more stale some-old same-old. Of course on the other side of that spectrum we have the whole indie scene, but too much indie might not be a great thing, either...

Its the beginning of the end, I wanna back to sprite Jrpgs that cost only 300k to develop :P

I actually think we will see a lot of more mini AAA games.. Ubisoft was talking about them

http://www.gameinformer.com/b/news/archive/2013/09/06/video-interview-ubisofts-yves-guillemot-talks-console-transition-free-to-play-and-game-prices.aspx

Call of Juarez: Gunslinger and Far Cry 3: Blood Dragon are a Mini-AAA game.
Smaller digital mini-AAA games so they can really target a specific audience and sell to them with a smaller development cost... Blood Dragon sold 1 million copies..

I don't know, but the sooner the better. Big budgets seem to reduce the will to take risks, which in turn reduces innovation. Games are too similar to each other for my taste these days.

I'm surprised Capcom isn't doing too well considering how it already seems like they're doing everything they can to make quick easy money (re-re-re-releases, DLC).

If this continues, only a handful of of big publishers and developers will remain. And in the end, gamers will end up with big AAA games and indie games, everything in between will disappear or become extremely rare.