Really good argumentation in this thread, Bod. I agree that third-parties are in tough shape, and they're likely to get worse before the situation gets better. (The performance/muscle car analogy is an excellent one to use.) Still, I don't think it's quite as dire as you've pointed out. I think there's still an untapped market on the Wii for games built around the traditional "performance" specs, one that will exist for at least a few more years as we continue to make the transition into the new social/interface gaming cycle. Let me put it in the form of rhetorical questions:
How many blockbuster first-person shooters are there on the Wii? One at most, and that's if you count Red Steel. It sold a million units.
How many blockbuster RPGs are there on the Wii? Zero. Maybe you could count Super Paper Mario at a stretch - that sold two million units.
How many traditional fighting games are there on the Wii? Zero. Brawl is the closest, and it's done pretty well.
How many traditional racers (non-kart) are there on the Wii? A couple, certainly nothing from a top-tier development team.
You get my point. The traditional big-selling genres are virtually non-existant on the Wii, aside from Nintendo's own first-party efforts. Instead we have lots and lots of minigame collections and quirky niche games. I would argue that since ALL of the "performance" games have gone onto 360/PS3, there's an underserved market for these titles on the Wii, one where a third-party publisher could potentially make a tidy profit. That's what I would do if I were in charge of a third-party publisher right now: I'd say "we need an 8.5 shooter and an 8.5 RPG on the Wii right now, since we'll have the market to ourselves."
At the very least, that's how I'd answer the "what should third parties do?" question. That and publish a lot of multiplatform 360/PS3 games.
End of 2008 totals: Wii 42m, 360 24m, PS3 18.5m (made Jan. 4, 2008)
