Many people say that Nintendo should not enter a self destructive hardware arms race with Sony and Microsoft.

But what about the developers and the self destructive arms race they are in vs. other developers. We have lost over 80% of our AAA game developers since 2012. Thats is a huge number.

That is a lot of franchises that are gone.

Thats a lot of games we will never be able to play.

Think about that. 80% gone.

Here are some links:

http://www.trustedreviews.com/news/80-of-aaa-game-developers-lost-during-ps3-and-xbox-360-era-says-ea

http://m.ign.com/articles/2012/12/11/20-studios-we-lost-in-2012

http://venturebeat.com/2016/12/20/crytek-shuts-down-5-game-studios-after-a-weak-2016/

http://m.windowscentral.com/microsoft-may-have-closed-five-more-internal-game-studios

http://www.seattletimes.com/business/microsoft/disney-lays-off-more-than-60-at-bellevue-game-studio/

http://igcritic.com/video-game-franchises-and-developers-that-closed-down/

https://en.m.wikipedia.org/wiki/Category:Defunct_video_game_companies

With the graphics demands from consumers, developers have been forced into a self-destructive arms race. Game budgets are soaring and profits are not keeping up. The investors are looking at higher risks with less potential gain.

The video game industry in 2016 has made a reported 91 billion dollars in revenue, but at the cost of how many developers.

How long can this go on? How many more game developers will cease to exist? Is the hand writing on the wall for the end of our hobby? Please post you comments politely and try and stay on topic.

But forget about all this. We have to give voice actors more money...

Are you implying that Shovel Knight is the best game of this generation? Because if so, you are right.

Too polite. Too much restrain by not mentioninig console manufacturers involvement.

Yeah, what Rol said.

^this, nicely said 

If consumers didn't ask for it, then why do they keep buying more advanced consoles?

No one is putting a gun to their head telling them they must buy a PS4/XB1, you could just keep playing on your XBox 360/PS3.

And no "mediocre games" don't sell. Not even the ones with fancy schmancy graphics, there are many examples of games with nice graphics that don't sell well. 

What's happened is the game industry as its matured over time and has become more segmented. The home console today, with everyone owning a large screen HDTV flat screen set (thanks to the break through of LCD/plasma displays that are picture thin) has led to the home console business to center around big spectacle games that take advantage of said TV. 

Smaller scale games/pick up n' play games have now become domain of smartphones/tablets with a place on consoles via the indie scene. This is also an example of a change in consumer lifestyle technology -- the smartphone and table is something that didn't exist 15 years ago, just like flat screen TVs now allow every home/room (virtually) to have a large screen display. 

When I was growing up in the 90s, a big screen display required a giant ass rear projection TV that took up a huge amount of space and was hugely impractical (and expensive).

But it's not dissimilar wha's happened to Hollywood movies ... there are less dramatic films and more big budget blockbusters, whereas back in the day you got like only 1-2 "blockbuster" movies a year (see: summer 1989 where Batman ruled the entire summer). The advent of computer graphics special effects made special effects driven blockbusters more plausible to be made, and that changed everything. 

I do think with PS4 era graphics though you are reaching a point where virtually any kind of 3D environment can be rendered with a lot of complexity and look realtively good. You can go further yes, but the amount of money you're going to spend to get close-to-CGI visuals is largely not going to be worth it. 

I honestly think there is no correlation to having a good looking game and having it rake in billions in sales. Larger companies that want to pump out pretty games can barely scratch the market that games with a more defined footprint can accomplish. If you look at what has happened to Crytek recently, they pumped out the best looking games even to this day, yet they flopped. Also if you look at Crysis 3's budget, it is relatively smaller than any other AAA studio that is trying to appeal to the consumers through aesthetics. But if you look at the other side of the pool, there are games that look half as good and less than half the budget, yet is making way more money. The whole "Let's make it prettier so it sells more" is just something large companies have disillusioned themselves into believing.

And out of the ashes the indies shall rise.

If you don't like it, don't buy it. It is consumers who demand pretty graphics, every perceived downgrade or non perfect texture is criticized to no end. Any sub 15 hour game isn't worth the money, indies don't count, PSVR has no real games, it looks like a ps3 game. It might be a minority that shouts the loudest, yet it's the masses that follow and buy pretty graphics in droves.

There's no rule other developers have to compete on the budget. Blockbusters for the masses can co-exist with small budget quality movies. If you've got a good idea, it will sell on its own merits. If you've got a mediocre idea and don't have the budget to polish your turd as well as EA and Ubisoft, too bad.