Each and every month, PS+ offers several games to its subscribers for no extra cost. Some of them are AAA titles, heavy games that (should) sell many pieces day-one.

Now let's put the pieces together: A patient gamer does not have to buy every title day-1. All he/she has to do, is wait several months and play it for free. For a meager 50 bucks you get a full library and a backlog that will keep you from buying new games every couple of months. Exception to the above, are personal favourites which we all need to get as soon as possible.

The question now stands. Out of those 50 bucks what profit does Sony make? Even more so, what does the game developper/publisher get out of it. If the situation described above becomes trend, should that not mean that devs will earn significantly less money? That they will reduce production values to meet decreased income? Sony will perhaps need to spend more to acquire those games for PS+, reducing the quality of the games offered or even reducing the quality of the services.

All things considered, if devs and publishers find console market unrewarding, should they not move to other gaming markets like tablets and smartphones? Devs that now bring us diamonds like Bioshock:Infinite and Brothers: A tale of two sons, will be instead making variation of Bejewelled?

Well, this is exactly what I do, although I understand I'm in the minority. With a huge backlog, I can afford to wait a few months. For example, on Black Friday I got The Last of Us for $25, BioShock Infinite for $20, Borderlands 2 for $15, etc. Earlier this year I got Ni No Kuni for $20, Halo 4 for $10, etc. You don't usually have to wait long.

And I kind of get what the OP is saying. I've bought zero physical Vita games because I'm banking on them arriving "free" on PS+. I've also cut my PS3 purchases in half because of all the great games available through PS+. I'm seriously considering returning BioShock Infinite and Borderlands 2 since both are on PS+, although I imagine I'll like them so much I'll want to keep them in perpetuity.This

Sorry but, what is your argument, what are you trying to say? I dont see your point. You ask the question whether ps+ will bring down the industry and dont back it up with evidence that could lead to it. You immediatly assume a gamer will rather wait months to buy a game, because you know, somehow you also assume that every AAA game will come to PS+, to make it even more ridicilous: the game going to PS+ would be in a fixed timeframe and the gamer will exactly know when a game comes on ps+

Are you for real? When games like GTA V and TLOU break sales records, how the hell can you even claim that a patient gamer does not have to buy games day 1? There will always be enough people to buy it, it will have sales, even on psn. And when a publisher sees that her game hasnt got legs, then it makes sense to put it on ps+.

Sony does give money to the devs for putting their games on PS+. so in the case of Bioshock infinite. 2K made money from the sales they made at launch, but lets say legs arent too strong and they expect to make like 3 million dollars in sales. sony could come in and say "well, here is 3 million and lets put it on PS+". 2K would make MORE money this way, since it would continue selling to non PS+ members and they would have made the 3 million they thought they would. and it would put the game in more peoples hands, so if a new game comes out, PS+ members would have broadend the audience for the game. so it helps with marketing and generating revenue. this is just a hypothetical example, of course. 

also, as you said, it opens the door to more money from DLC purchases.