Could pressure that is caused from the internet and more specifically Metacritic. Be causing them to try get noticed by placing too much of there resources in a single game? Is this causing some of the smaller studios to go over budget and out of business in the process?   

I have never heard development studios complain this much before the generation started about their profits and about development difficulty, it will probably, only get worst as the next round of systems are released.

So will we even have any small developers left or will only the major publishers and developers be left?

Regarding downloadable games I think that the trouble with downloadable content is it seems harder to get attention from mainstream media and less people are able to buy these games such the younger audience of gamers so it’s also difficult to make a profit.

What do you think is the solution for game studios in order for them to stay in business?

Source? myself.

I'll also say by going over budget the games themselves seem to suffer in quality and innovation as well.