First of all there seems to be confusion about what he means by a "B" game*. I think there's nothing derogatory about it and I think he means the typical $20 million budget category of games that typically sell 1-2 million copies. This category that is very important for core gamers like us on VGC.
He is pointing to a trend where publishers increasingly tend to not want to fund these mid-level games because they think there's too much risk involved relative to potential profits. They hesitate to fund a category of games they see more often flop than break even, a category that too seldom produces smashing hits like Bioshock, Batman and Borderlands managed to become. And if publishers put more focus and resources on the really big "AAA" games, then naturally they will be eating into the mid-level category's sales.
These games typically sell 1-2 million and seldom make any substantual profit (and sometimes kill their own developer lol):
Vigil - Darksiders
Eidos Montreal - Deus Ex and Thief 4
Ninja Theory - Enslaved, DMC
Human Head - Prey, Prey 2
Kaos - Homefront
Visceral - Dante's Inferno, Dead Space
4A Games - Metro 2033
Capcom - Dead Rising, Dragon's Dogma, Lost Planet
id - Rage, Doom, Quake, Wolfenstein
Raven - Singularity
Eden Games - Alone in the Dark
Monolith - Fear, Condemned
Avalanche - Just Cause
Arkane - Dishonored
38 - Kingdoms of Amalur
Realtime Worlds - Crackdown
Remedy - Alan Wake
Obsidian - Alpa Control, Dungeon Siege 3
Digital Extreme - The Darkness II
Splash Damage - Brink
From - Dark Souls
DICE - Mirror's Edge
Insomniac - Fuse
Reality Pump - Two Worlds
Radical - Prototype
UFG - Sleeping Dogs
Ppl can fly - Bulletstorm
Double Fine - Brutal Legend
IO - Kane & Lynch, Hitman
Snowblind - LOTR War in the north
Take 2- Mafia, Max Payne
Crytek - Crysis
Starbreeze - Syndicate
Gearbox - Brothers in Arms
Mercury Steam - Castlevania LOS
Instead, Ubisoft is increasingly focusing on the big-AAA strategy, with $50 million budgets and teams of+200 guys making one game. This strategy targets +4 million copies or else they revamp the franchise.
Assassin's Creed
Watch_dogs
Far Cry
Tom Clancy (Splinter Cell etc)
and I bet the next Prince of Persia will have much bigger production values than usual.
* EDIT: I'm actually confused too and might have misunderstood him. By "B" games he perhaps means the low-quality games who get 60% on Metacritic and sell 500K? Because he seems to acknowledge that the category I call mid-level already is under threat since he says "The in-between, the belly of the market, is the one that just collapsed in a way and disappeared".
