Studio shutdowns anyone?

Actually, though I get the feeling a lot of people don't want to hear this, this should be, for many developers, one of the least expensive jumps ever in terms of percentage budget increase.  It certainly won't rival the jump to last gen.

A lot of the tools are there.  Middle-ware and game engines are making the transition very smoothly.  Art assets are already a higher resolution than will be used.  For multi-plat developers, the XO, PS4, and PC being roughly the same architecture will cut down both effort and time spent on ports by a significant amount, which translates directly to money saved.  A lot less money and time will be spent on training, as well.

At the same time, digital distribution continues to rise, which results in more money per unit sold going to the people who made the game.

As far as game-play, it's worth it.  Hardware has always driven game-play, which is easy to see by looking at KZ:SF.  The environments are much expanded and levels are bigger and more robust, which is directly a result of more powerful hardware.  Yes, that means more people working on those games but damn if it doesn't seem justified to me.  KZ:SF already looks like a lot more fun than KZ3 based on how open things are.

Again the japanese. 8th gen sounds promising then :L

Well, they have less tradition over bringing their games to PC.

Gap to be only x4 confirmed. Next gen my ass.

So, according to OP, it's clear that even though the tools are there to make games more easily, the cost of making the content of next gen caliber increases due to the effort required to create those worlds and that detail.

If Nintendo was right with the Wii, I can't imagine how much more on the money they are with the U. They'll be fine. I'm much more concerned for the twins' ecosystem after reading this actually.

I was hopeful that this coming generation would see a much smaller increase than the previous one. If not, I think we are assured fewer developers and less innovation as companies grow increasingly conservative. I still have hope, but we shall see.

1) At best the development budgets will stay the same. If developers are having problems getting profits now, I don't see how that will change this coming gen.

2) As far as I know you have to pay Steam (just an example), to put the game in there. Is the same as paying the retailer, it might be cheaper but that's about it.

No doubt more expensive but I think its being blown out of proportion. There was some ubisoft data that said a 10% cost increase which is tiny compared to the last jump. Quadrupled effort for production doesn't mean for cost or for the entire cost at least. It sounds more like he is referring to a segment of the development process. Maybe its harder, costing more in certain areas but the ease of development cuts costs too. In the end more expensive but not quadruple, that's just out of context.

It's hard to think of another context when he said that the Production effort has quadrupled, that seems pretty all-around effort the way I read it:

"It's also a lot more demanding, because the production effort needed just to make a next-gen title now is not doubled; It's quadrupled."

Also, Ubisoft =/= Guerilla games. There may be differences in how they produced games in gen 7 and how they are producing them now.