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I doubt the industry will crash like back in the 80s. Instead, what's happening is the industry is shifting severely, evolving.

Soon you will no longer need a publisher to release a game, already its happening (XBLA, PSN, WiiWare). This will in fact, make the market larger for developers to directly bring the games to the gamers. Optical storage will be a thing of the past, and even BluRay will be obsolete before it can take the throne from DVD.

If it is not the next gen, then the one following will have no more use for separate storage beyond a built in hard drive.

All systems will become small boxes with wireless connectivity and a hard drive, transmit in HD quality, and as said before, will have fully downloadable games, directly from the developers' servers.

In the end, the publishers may fade away, much like how they are in the music industry, but the studios will live on and even thrive, at least those who can find the resources for development.

Just my thoughts on how I see the industry shaping up around us.