Where the Jobs Are
I don't think it is at all; there has simply been a large market shift over the past couple years. There are a number of great opportunities that have emerged simultaneously with this predicament.
- Growth in the indie space. With so many talent developers finding it difficult to make it in the AAA console gaming space, many are striking it alone. Xbox Live Arcade, the smartphone (particularly iPhone/iPad) market, PC, and online social gaming spaces have had a flood of startups. These markets are are hit driven as it is for consoles, but the markets themselves have grown tremendously and the barriers for entry are considerably lower.
- Growth in the mobile market. Over the past couple years the number of mobile developers has exploded, along with the market size. Some, in only a short couple years, have become practically giants in their own right. Mobile gaming may not be as 'glamorous' as console gaming, but the number of potential players is huge. The rapid advancements in mobile gaming technology has made wicked awesome gameplay possible that wasn't possible only a couple years ago. The number of people who own an iPhone or Android phone is an order of magnitude larger than the number of console owners there are, each of them a potential gamer with the right apps.
- Growth in the social gaming space. When I was graduating with my Bachelor's degree three and a half years ago, social gaming was basically text based games with a couple buttons to interact with the game. Now they are incredibly richer, and everyday there are new games being released with better graphics, better audio, and better gameplay. Wikipedia tells me that there have been over 55 million copies of every game in the Call of Duty franchise sold. Top social games have more unique players than that play them in a month.
BTW, hit me up if you've got skills and you're looking to make a move into where gaming is going