According to Gamasutra, the reason for the collapse of the game industry is coming from within.
According to the article, the main problem at the moment seems to be how to get enough money back out of the struggling economy whilst game pirates and re-sellers drain off precious resources.
Atari is taking the position that the used game sales are
'extremely painful', but has its own methods to get around it, such as online components, but it's difficult to see whether that will work.
Gamestop's CEO weighed in in support of resales. So no change there then.
However, David Braben, (Creator of ELITE, and now head of Frontier Development) wasn't quite as enamored. "Five years ago, a great game would have sold for a longer period of time than for a bad game - which was essentially our incentive to make great games. But no longer. Now publishers and developers just see revenue the initial few weeks regardless of the game's quality and then gamers start buying used copies which generates money that goes into GameStop's pocket, nobody else's."
Do you think 2D Boy want to make another 'World of Goo' with this hanging over them?