There's a difference between being in a decline and actually being in trouble, although looking at Ubisoft and THQ, I could see why some would see the videogames industry as a wounded animal these days.
I think there are lots of obvious reasons why a lot less is being sold, and I don't think it's the reasons that the whiners would like it to be.
First you have a terrible US economy, where a lot of people are losing their businesses, jobs, and homes. There's no money to go around, and that means a lot less games sold. And while console titles have started dropping drastically in price shortly after release, that still presents a delayed reaction, and most likely leads to fewer sales when the hype is at its highest around release.
Secondly you have an array of old consoles, which may provide a large install base in theory, but could also just mean that a lot of people are pretty tired of playing their Xbox or PS3, beyond a game of FIFA or NFL.
Thirdly you have a PC market that may be on the rise, but still isn't big enough to pick up the slack from the consoles. I doubt it'll get to that point before the consoles launch their next hardware, but it's only going to get bigger until then.
Games journalism has always been pretty decrepit. As a profession, it chose to hire gamers, rather than writers and critics. There's no reason why a serious editor would like to have a critic on his staff who just loves everything. Quite arguably you'd want the Jim Sterlings and Tom Chicks of the world to do your games reviews, echoing people like Roger Ebert for movies. People with actual, living breathing opinions. If you like everything as long as the production values reach a certain level, then your opinion is completely invalid, and sadly that's the case for at least 80% of games writers.
That's aside from the fact that they're so far up the ass of developers and PR people, but that's all circumstancial, their reviews speak for themselves.
I always give my opinon on that, it doesn't have a lot to do with sales...
Overall I don't think the industry is in crisis, I just think times are bad, the prices aren't being adjusted to account for it, and the consoles are old hat.
