As larges companies merge it leave rooms for other to grow. When EA was "consolidating" in the 90's you had publishers like Ubisoft grow into a giant too.
There is also the development side, talent quits and starts new dev houses (From Rare to Free Radical for example).
You also have to take into account that one big game can make a company explode (Activision in the nineties with Tony Hawk, and then again in 00's with Guitar Hero).
Now it is even easier for smaller developers to "break-in". XBLA, PSN, DS, PSP, Wii and Wii Ware all offer ways for developers to make games with out the mega budgets. As this market expands, many of these will be bought up or begin developing bigger projects.
Don't worry. Free Market Rulez. (The z is a continuation from my other post.)
I would cite regulation, but I know you will simply ignore it.
