This "analysis" of the gaming industry strikes me as remarkably shallow.

Funny that the blockbuster titles mentioned in the article were mostly developed by small businesses which were then gobbled up by the industry giants for huge, huge sums requiring complicated financing deals. Now the giants are struggling with red ink. The fiscal assumptions made during these acquisitions didn't quite pan out as anticipated; a little glitch called "the worst economic downturn since the Great Depression" got in the way. Sales are by any measure stellar, but not as stellar as they'd expected, and that's thrown the acquisition balance sheets aflutter.

I wonder why the author hasn't mentioned this little fact?

Entertainment giants like Activision and EA, as they view the world through an accountant's lens, tend to struggle to themselves generate anything creative. This leaves them with generally uncompelling products. Startups can come roaring into town and upset the apple cart at any time: Blizzard, Bioware, Rockstar. The old giants, to protect their market share, buy out the upstarts for vast sums, and the giants end up with the mature tail end of the upstarts' product cycle (hint: it's expensive at that end, not as creative, and not as profitable), and then the Next Big Thing roars into town and catches them by surprise all over again.

GTA broke new ground in gaming. GTA-4, not so much. The series will die out eventually, having exhausted its creative energy (and profit potential). But in the meantime, every new edition costs more to produce without a proportional jump in marketplace excitement. That's what owning the tail end of a product cycle means, and these entertainment giants paid a pretty penny for the privilege. The shocker isn't that Activision, EA and the others are troubled during a downturn, but that they manage to survive under that business model at all.

If you're a highly creative game designer/programmer ready to make his mark, go with the upstart. You might fail. You might become rich. The difference will be your talent and energy. All you can get out of the old giants is a 9-to-5 job for ten years and a layoff.

And apparently a 60 hour work week with a salary on the low end because all the punk teenagers that try to get into game programming drive up the supply...