But this isn't the full story, in fact there is a larger lie in the gaming business.
The reason folks are moving to consoles is because of the amount of sales they generate. They have to do this because most publishers now spend far too much money on marketing, artists, and etc when developing their games. Recently Ghost Recon, for instance, cost something like 9 million dollars to make. This is something that Ubisoft doesn't plan on recouping for 3 years (ie the whole cycle though the bargain bins and multi-packs). A smaller developer could never hope to make any money, even though their sales volume would have made a publisher a mint a few short years ago, in the current climate. And if they did sign with a big publisher they will NEVER see royalties as they will never sell enough copies to make the break even point. I get very frustrated by small developers who sign on with large publisher because for the most part they are setting themselves up for eventual doom unless they dumb down their games for a mass audience. But the lure of retail is strong (the dark side is powerful
).
And besides the large publishers bleeding money like a stuck pig the retail outlets are worse. Retail is the reason why niche products will never be proitable again, much like niche board wargames are not on the shelves anymore. Only the top 10-20 games in a year will ever make money in retail, the rest will operate at a loss. A large publisher can eat that, and in turn will make sure the developers never see a dime in royalties.
Ack don't get me started. We lose developers all the time to retail publishers, but unfourtanetly they don't know HOW much more money they can make Online and that in the long run they are going to kill themselves trying to compete with EA and Sierra for the mass market.