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I don't think next generation graphics will represent too much of development cost increase. Believe it or not, a lot of top developers create the same amount of assets and art that you'll see in demo's like the Unreal Engine 4, the difference is they compress the assets or use bump mapping instead of displacement etc. The reason why so many companies have been suffering in recent years is because consumer are buying less games, partially due to mega titles like COD and online multiplayer which means that it can sustain some gamers for an entire. I believe software sales in the past were far more splintered, so it was beneficial to more companies.