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elnino334 said:
There won't be a crash mainly because first party and second party software has sold sell especially for MS and Nintendo. Then you have some 3rd party that have had success and might not have had the huge budgets. Also you have to look at it worldwide in terms of making a profit and most high profile 360 games have made the 500k if you combine world sales. I don't think is fair to see a number of games bomb or flop as that is nothing new. Based on the numbers success far outweights failure in the gaming industry. The main company's that are hurting are the ones that only went with the PS3 and as mentioned it has a smaller installed based which means less sales or profits. Again doubt there would be a crash and some games bombing is normal.

Games bombing is nothing new of course, but it's never hurt the industry to the degree it does now.  The costs to develop games (on HD) have more than doubled. 

 Analysts have been warning that this would be a problem.  According to them a major game does need to sell in excess of 1m ww just to break even.  With the low adaption rate of HD consoles, a lot of publishers are going to be bleeding after Christmas.

Expect a lot of development to switch to Wii where the risks are much lower and installed base higher.