I think it will "crash" but not the same way as the '83 one, thatll likely never happen again. I think it will crash in the sense that there will be a time where 1 of the big 3 leave and a lot of AAA studios shut down from too big of budgets/not making enough returns. They'd be eventually replaced by newer devs, thats how I see it happening at least

There are a lot of ways an industry can crash.  I'm not saying it will, but it's certainly possible.

And it's not unprecedented. There have been similar-ish situations in other industries in the past.

I actually wouldn't mind examples of both instances =)

But like mummelman put it just a few post ago; (digital) gaming has spread out too far and wide for it all to simply nearly disappearing. 500m downloads of Angry Birds should tell you something about how popular gaming is now.

Honest answer from me: never. If it is going to fail it is going to be a long long time away from now like 100+ years at least.  It is going to evolve and expand itself with content from other markets.  TV providers will crash first.  Once Sports leagues start streaming online, multiple millions of people will have no reason to pay a cable or satellite bill with how accessible Netflix, Hulu, Crackle, Redbox have become.

Well the AAA market is declining but I don't think the video game market will crash. I do think that there will be a large amount of companies that will need to rethink their strategies and as such we will lose a lot of great companies to the evils of Smartphones (dun dun duuuuhhh!)

but seriously, I don't like where gaming is headed >.> it scares me a bit

I doubt an actual crash will ever happen. The industry is too big to fall so suddenly.

However, I don't think there is going to be a growth and I do believe there will be problems and even more casualties. Regardless of how well a videogame consoles sells, software costs continue to rise and some tragic losses are bound to happen. (Damn it Irrational! )

I'm not saying it will disappear. An industry can crash without being completely destroyed.

For an example, comic books in the 90's. Arguably, the collapse of the Hollywood studio system. For that matter, historians might call what's happening in books and movies right now a crash. 

It will happen when XB1 and WiiU actually fail and the PS4 dominates and the Video Game Industry becomes a total monopoly.

Console gaming is in a slow-motion wreck, certainly, one that will change the face of things as we know it.

Not with a bang, but with a whimper.