jammy2211 said:
As a quick sidenote, what the Wii is doing is much healthier as although costs will rise the market is growing with them. It is much more sustainable, I don't disagree with any of that. Just as we've always seen, and is the mentality of the industry, games will still be more and more about bigger budgets (albeit more on the marketing side) and the smaller teams will be cut out.
Good luck with the quoting lol.
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Yeah I need luck with the quoting 
Like I explained "the bigger and badder" is a natural process ( not exclusive to the gaming industry ).
But the problem isn't the existence of big project for core gamers like Super Mario Galaxy.
IMHO the problem is platforms that only offer Hollywood style poductions because that is their philosophy ( above all when 3D graphic has become good enough for many people with PS2/Xbox/GC ).
Wii and DS offers opportunities also for small/mid size publishers because their main focus isn't on graphic. Blockbuster production values aren't a requirement because those systems attract a huge variety of consumers some of which don't mind about high production values.
About the marketing matter , well, if I must bet who between two games had more marketing budget knowing only that one had a far more high development budget than the other then my answer will be surely on the costly one because more you invest, more you try to assure that your investment won't be burn out 
However talking about small company that had an unexpected smashing success on handheld and home Nintendo systems I always like to cite Cooking Mama.
That game was published by two small companies like Majesco ( on the verge of bankruptcy) and 505 Games in the west.
Well I don't remember initially a great marketing push by Majesco or 505 Games however when become apparent that the game was selling healty month in month out those company spend the money earned to promote more heavily CM and the game ultimately become a million seller.
Sure a game like Phantom Hourglass from Big Nintendo sold more but I don't think that matter to Majesco ( recenty they started to get profits again ).
What advantages are there in using retailers? Well if there weren't then nobody would use them 
More seriously "packaged games have a number of advantages, from the guarantee of a certain amount of sales volume to the firmly established buying habits and infrastructure that I think should be preserved in the future."
"[...]the consumer will want an experience that’s best delivered through physical goods, simply because of the memory size required. There will always be those opportunities for big, in-depth games on retail products."
Keep in mind that I don't think one distribution is better than the other one, in my opinion they are both good but for different things.
Ultimately a good echosystem is one where customers, retailers and producers have a huge range of diversity, with their own aims and needs.
Core consumers and non-core consumers are both needed , sometimes for different products.
Indie deveopers like 2DBoys, small publishers like Marvelous and big companies like Nintendo must have the opportunity to get their profits ( if they can ) aiming at what they are good to.
Things goes wrong when this balance is off.
