The game industry needs to die to be reborn into what it should have been in the first place.

What do you think would happen when the majority of the rundustry is run by developers and have no business experience? In good times they could make money with almost anything, but this is the time that the chaff is burned away and bad companies die (or get bought out). Rockstar is prolly the number one example of this: They have a huge cash cow but they still lose mony. It is almost unbelievable.

What's that then?

Less cinema-like and more game-like.

I'm all for games being more realistic with impressive physics simulation techniques and so on, I love realism in games, but all we have got so far this gen might as well have been done on the PS2 (Modern Warfare, Gears of War) The only game that tried to innovate realism was Star Wars The Force Unleashed, with it's DMM and Euphoria, but it was poorly desinged and a failure. Oblivion was great and immersive as well. The leveling system was brilliant but the fact that enemies leveled up while the player did killed it. If not more realistic, games should try to be more imaginative and more game-like, and less cinema-like. Games should try to either be games (focus on gameplay), or strive for realism, not try to be like mindless hollywood movies like most do this gen.

This article smacks of elitism and the chicken little (the sky is falling!) mentality. It is true that a great many publishers are absorbing huge losses due to their focus on oversaturating the market with big-budget titles, but a few simple tweaks can lead to victory. Ubisoft seems to have a very diverse lineup across all platforms to accomodate all manner of people, and they turn a profit.

your average AAA game should not be your average game. It should be above average. You only need a few of those a year, and the rest you can flesh out with Wii development or less prestigious PS360 games.

I see the authors point.
But the question he has to ask himself is ho well these story driven games will sell on the wii? Not very well, because the audience isn't on that console. Publishers might make a profit due to putting little emphasis on the graphics though, since it seems to make 10-25$ million more on HD games because of that.

This I'm not so sure of. Wii hasn't received any of the big name franchises yet, so until the main franchise RE, or GTA, or any other big franchise releases on Wii this is all heresay. It is already fact that Wii sells the most software. But more importantly, if the Core gaming market isn't able to sustain these type of games, then maybe it that demographic you speak of isn't worth saving.

More gameplay and less movielike is something i would like to see too. When you look at how they push 'new things' on the wii i get rather sad. I expected much more creativity from a creative industry.

Oblivion was indeed fun - when you became an assassin was really fun - all quilds were wel done. But that leveling of enemies did suck big time. What's the value of leveling when the difference is almost nothing. It pissed me off, although not as hard as the damn levelcap in fallout 3. Damn you, Bethesda.

I would like more Gameplay investment too. I mean, I love good graphics, but Assassins just proved they are worthless without a good gameplay. I mean, the game sold on hype solely and I bet that AC2 will see a less stelar opening and good legs(if it's any good).

But the industry is indeed going the Holywood way. And this is Bad. Back in the days we've got the Fugitive, Die Hard, Terminator, Indiana Jones, all good Blockbusters. Nowadays we've got Transformers and Star Wars Remake, IMO, bad Blockbusters, worth a rental. Very rarely we got a Dark Knigth or a Matrix. I want them in games too. I want more Bioshocks and Valkyrias and less Assassins Creed. Of course I want sequels, cause I want more of the same good stuff, but I want novelties too.

The console industry needs to distinguish itself from PC gaming, like the Wii is doing, or else Console gaming won't survive against PC gaming.

In my opinion, the PS3 and Xbox 360 are giving inferior services and games compared to PC, which will always make them a class directly below PC gaming. Not only that, the HD consoles don't even have the versatility, variety and support of different business models, niche markets and games.
However, the Wii is showing a more viable and unique direction that does not clash with the superior platform. I believe that is one of the reasons why Wii is having so much more success than both HD consoles combined.