I find this video absolutely hilarious.
The jist of what they are saying, "The business model is broken. I multiplyed my cost by a factor of x10 and revenue is only increasing by a factor of x2 or x3." The model current is working just fine now days, just ask nintendo.
The developers need to get their finances in line and start making cuts where they are actually effective and needed. Everyone has noticed they have been cutting content and selling its as DLC - this is the wrong place to cut cost.
Some ways to cut costs - use no name voice actors or no voice acting at all, program for a lower native resolution and just have the hardware upscale it, manage a marketing budget porportional to the actual cost of development of the game, downsize teams and redundant management, use a styleized approach to cut cost further, etc.
Example: Demon's Souls broke even on costs after only 75,000 units and the game looks and plays pretty nice.
Following this, you would have the same gameplay, same story, probably more content since it is less costly, and the development cost would PLUMMET! You could sell half as many games and make MORE money.
*Sigh* Sometimes I think common sense is the least common of all the senses...
