Honestly, I think there is a gigantic problem in the industry ...
The problem is that the vast majority of development resources are spent producing games that appeal to a small minority of gamers (and potential gamers); if I were to put numbers on this, I would say that 80% to 90% of most publisher's budgets is dedicated to games that target 10% to 20% of the market. What this means is that most of these companies are struggling to turn a profit because most of the games do not end up as the high profile successes these publishers need to justify their budget while most gamers are not having their needs met because only a couple interesting games are produced for them in a generation.
People regularly talk about how certain "core" games flopped on the Wii without realizing that there were dozens (possibly hundreds) of games with far higher budgets released to the HD consoles that saw worse sales. If the publishers devoted this money to different products across multiple genres they would (likely) be able to produce multiple games that each had similar sales to these failed projects, there combined revenues would be far higher, and the industry on the whole would be healthier.
While many people dream of this happening, if game development budgets continue to increase we will have little more than an industry producing Call of Duty or Halo clones at budgets that are so high a single failed game can bring down a publisher; and the industry will likely die (except for Nintendo).
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