The industry is eating itself.

[Dante9]

It's funny, the industry seems to be doomed either way according to people, whether they have too few or too many games.
No, "too many" is a good thing. Some of them will fail or meet with less than a stellar reception , of course, but that's how the market is supposed to work. The best will rise up and survive.
The industry is also somewhat unique in that products will sell over an extended period of time. They don't really expire as such, or go out of fashion. In fact, most games are at their best a year or two after their launch, with all the patch fixes and DLC.