Please read the edit at the bottom!
It's a very controversial topic to say the least. This blog is going to be stretching to different points, so please enjoy!
Lack of innovation.
Without a shadow of a doubt, the level of innovation in the gaming industry has plummeted massively, to the point that the best selling games are generic war shooters that come out on a yearly basis. Companies like EA and Activision have become so big, that taking a risk is too much of a risk. I was not expecting EA to announce Mirror's Edge using the FrostBite Engine 3 as well as being an open world game. As happy as I am about it, it's obvious that this was a lucky break for ME fans. If they didn't show the amount of demand for a sequel, there is no way in hell that EA would let DICE create that game with the scale it's going to be on.
The really innovative stuff now comes from the indie devs, the ones with a very limited budget to spend on a game, yet reach success to the highest order. Prime example? Minecraft. A game with graphics worse than the early games that came out of the N64, but has sold massively and is still being played frequently to this day. Indies have shown a lot of innovative ideas and try to separate themselves from the status quo, which has been rewarded in some way. The most recent example of this is none other than Mighty No.9, a game from a Japanese company called Comcept. Many of the people involved with the project are former employees of Capcom a Japanese gaming company who molded many people (including myself) into the sort of gamer they are today, but only have 152 million in the bank. The thing with the Japanese industry right now is that they've been putting games with massive potential on mobile devices, which could very well be realised at a much larger scale on consoles or even handhelds. Keiji Inafune separated himself from that and is now putting Mighty No.9 on basically everything apart from smartphones and did it all through a Kickstarter.
Go over to the side of AAA games and you'll find publishers spending millions on a game, whether it's graphics or just the marketing of the product. I don't think AAA games are the very bane of the industry though. Because let's face it, we all have that one game that had a massive budget for it and that we've loved more than any indie game. GTA5 being the most recent to fall into this category, which made a billion dollars in the space of 3 days. That being said, AAA gaming is definitely putting a hold on creativity in the industry.
Graphic, graphics and GRFX!
More than ever, the main investment that most publishers are making for their games are good graphics and while I do like good graphics, they do not matter as much as gameplay by any means. Now with some companies, we get both, but from others, it's about making a game look pretty but play like a bumpy road. A huge focus on graphics has also killed a lot of studios off the generation (I think about 150 notable studios this gen). Example: Team Bondi. They succeeded in making a huge world with amazing detail and mocap, but the end result cost them their studio. I like my good textures. I like my good animations. But I'm not gonna cry if I can't see the nose hairs on a character model. While most console gamers have this mentality, the mainstream media will judge a game completely off of it's graphics. Which brings me to my next point.
The mainstream media is without a doubt the bane of any medium. Gaming gets it worse for some reason. The media leads people to believe that gaming makes people violent, even though the game has a freaking rating on the front cover, gaming is the first thing that people jump on.
I've also heard people on N4G say that photo-realism in graphics will make the mainstream take gaming more seriously. Gaming would be blamed and labelled even more for different things. Plus, game development costs would be unsustainable. But then again, it's what the mainstream bros want, so devs have been focusing on GRFX GRFX GRFX! PC elitists certainly aren't helping with the situation, yet they say indies are now the future. Games that can have 8-bit graphics. Next thing you know, they're bashing consoles for not destroying 1080p and running BF4 at ultra settings, even though it terms of gaming, consoles are the main source of revenue for publishers. Not helping guys.
Too much competition.
I'm not talking about the amount of consoles there are (although I think their should be 3 maximum), but the market as a whole. You've got smartphones, tablets, Steam, the consoles, the whole seven eleven. I'm not saying the PC and consoles should go (consoles should be the last ones to go as they effectively saved the industry), but why do need the DRM riddled, weak and non-gaming centric smartphones in the mix? It's just over saturation.
It's the same way that I think of anime. It's extremely niche in the west, but I like it like that. Becoming mainstream brings in more money to make better things, but too many things would change, like Gigguk said in his last AZ rant. I don't think becoming mainstream has been bad for gaming as a whole, but it has some very bitter effects.
As a whole, I think that AAA gaming has brought us some pretty epic experiences, but now, those experiences are lowering in numbers. That's not to say that I'm losing interest in gaming, but there's not much that excites me to the max at the moment.
EDIT: I forgot to mention 2 things.
The hype machine annoys me to no end. GTA5 is an example of a game that has such as huge hype machine behind it. We didn't even see any gameplay for the first 2 years and that game was probably the most anticipated for the gen. It was a well crafted game, but the hype machine made it seem so much better than it actually was.
Also, as for whether the industry is going to crash... well that's for you to decide. Personally, I think that the industry is too big to crash. I can see company after company failing and becoming the next THQ's but not a full on gaming crash.
Anyways, thanks for reading and share your thoughts in the comments.