There's been claims for months saying this that and the other trying to say the Wii is a bad thing, a lot of mud slinging by people who fall either as a fan of another company or people who don't truly understand why the industry is and needed to change. 

One of the newer claims has been "Wii is killing the industry" which is mostly backed up with sales of a few party games, big deal, games of that nature have been around for years on PC for outragous prices, and they do nothing but help developers.

Now let's move onto the real subject at hand, if the Wii and it's user friendly games aren't killing the gaming industry, what is?  Why it would be anything that threatens the companies that make games and game systems, which is technology cost.  Yes console gaming has advanced way too fast to be held stable by higher costs all around, the whole point of console gaming was once to keep the price of making and producing a game down, but no longer are the days when a small team of bright people can make a game, it now takes millions and a crack team to produce many of the big games we play now.

Now how does this kill the industry?  Simple economics, you take much of your money to develop a game, to make sure you get the sales you need to get to make a profit you hype the game as one of the best games of the year and show footage of why it should be, which also brings costs up, then when it comes out if it doesn't meet sales expectations much like Lair, Too Human, or Haze the development team is out millions of dollars, that means jobs, new games, and entire companies can be lost in the wake of a huge bomb of a game. 

Even the games that do make the sales they need often times don't live up to the hype and are fairly short, which then usually means either the game is traded in at the local game store, which is then purchased and traded back in, in a huge cycle that never gives developers money.  Which means developers might not lose money from making the game but because of limitations of developing such a huge game title in a short amount of time coupled with hardware limitations they make short games which are traded in particularly fast which means they lose overall sales they could have had.

Developers are the backbone of the game industry, if entire companies that have been around for a while could be wiped out by one game that didn't meet expectations, that is the true enemy of the industry.  There is no doubt in that statement, console gaming was built upon having lower development costs to be more profitable for developers, but now the main attraction of console development is gone.  The only way for developers to survive is to make their games seem like the best games ever made, which doesn't further our industry in the eyes of the public to become a serious form of media, and overall hurts the credability of our industry.  The bottom line if you make the market where the backbone can't survive then the market falls apart, it's like taking out the middle class in a country, the game developers need an industry they can strive in and right now they're not getting it.

-edit-

Damn me and my not double checking my thread titles!!!!  Just pretend it says what I intended "What can potentially kill the industry, hint it's not the Wii"

god damnit ! make a conclusion i can't be arsed to read through it all XD

I think the bigger problem is the trade-in market. Irrespective of the length of a game a lot of people have to trade in to afford a new game.

Are the publishers selling the games to retailers at too low a cost?

Sounds a lot like my conclusion a while ago which is high development costs and long development times which yes is the reason why some developers are struggling in such prosperity.

What it does is takes middle sized and small devs out of the picture. They just can't compete. So the independent developers like Free Radical and Factor 5 who can only make one game at a time go down if it flops like we've seen.

360 and PS3 are really only viable markets for the large developers like Activision, EA, THQ, Ubisoft, Capcom, Namco, Sega, and Take Two. These are the devs that can put out 30-40 titles a year and have a few of them be big hits and be fine. But everyone else has to hope their game is the next big thing which is why they spend so much money on marketing to hype up the title.

Thus in such prosperity we are seeing more devs go down because of this which is lessening the diversity in the market. This is why people have been saying one console/one developer future because this is what would happen if everyone did this.

Luckily such things as handhelds, Wii, PS2, XBLA/PSN/WW and PC still exist that allow for cheaper but influential development that doesn't always drain the pocketbook. Thx to this we have been able to keep a lot of the smaller/medium sized developers alive. Also it allows more risk taking such that we get games like World of Goo, Braid, De Blob, Echochrome, ect. Also if the other devs start to learn that exclusive to one of the HD platforms isn't a good idea then they'll be able to stay alive longer. Have games like Too Human, Lair, and Haze on PS360/PC then they'll be fine.

Read it!  Anyway the point of my thread is to say the price of development is the true enemy of the industry at the moment cause it's killing developers which are the backbone of the industry itself. If there are no developers to develop games then the industry is dead yo.

The reason the industry is dwindling because a niche of gamers like the status quo. Nintendo realized that you have to evolve and let everyone in on the fun to make the effort grow.

Games are srs biznes, not supposed to be fun....

You know what kills the industry? Its the playstation 3. With the weirdest possible architecture and cumbursome bottlenecks, only too much time, too much resources and big companies can handle it.

Actually customers are the backbone of the games industry. If developers made titles worth it we wouldn't see them used in second hand stores. You would be hard pressed to this day to find a used version of many Nintendo games. Why because they are so good that customers couldn't imagine letting them go.

I do realize that costs are getting higher but that happens in any industry and has happened every generation. All 7th generation systems have a way for smaller developers to make a foot hold. They are called Wii Ware, PSN, XBL/XNA. Even both the portables have access to them now.

Long story short there is plenty of opportunity to thrive in the industry choosing any platform. Maybe developers need to stop clinging to the ideas of the past and try to make some new head room. I'm plenty tired of people talking about how the traditional route isn't working when there are plenty of ways outside ship game to store model in this age. If people wont pay full price for your product maybe there is a reason. Lets stop blaming unfulfilled customers and place it where it really belongs.

This thread should be titled "Stubborn developers killing themselves and innovation in the industry along with them"

Note: this is not in any way going after any one company or reason, though overall the blame should rest on a lot of the fans that demand better and better graphics with no idea what it really takes to give you those kind of technologies and what it costs companies to make.