These two publishers are hardly the only ones publicly struggling. Various factors, including high-cost HD development, have led to a shakeout amongst small and medium sized publishers like Eidos, Gamecock, Midway, and others while Activision rakes in massive profits. Of course, this is normal, companies that fail to adapt die. However, THQ's and Ignitions's recent troubles stem from a disturbing trend in game consumers, not from development or publishing difficulties. It seems that players are spending more time playing games, but paradoxically spending that extra time with fewer titles. Game makers have never in the forty-year history of the medium had such a massive consumer base to sell to, but players have never been so unwilling to try new experiences.

The phenomenon isn't limited to games. Movies, music, publishing and almost all other media are finding the same thing -- the hits are getting bigger at the expense of the middle. The so-called 'Blockbuster' nature of media isn't new. Limited shelf space and difficulties with traditional distribution costs made it a winning strategy in the past, but the internet should -- in theory -- do away with all of that, and create a marketplace where consumers can easily find niche products that match their exact tastes. Fewer readers should be reading Dan Brown and spending time with smaller books that more closely align with their interests. Easy access to music via iTunes, Amazon, Pandora, and other services should mean that listeners can find what they like rather than putting up with top 40 radio, but Katie Perry tied Michael Jackson's singles record last summer. The same thing should apply to games as well, Steam, XBLA, Xbox Indie Games Channel, PSN, On-Live, and dozens of other services mean that players have cheap access to the widest selection of games in history. With more players and more games, why does Call of Duty make more money each year?

While the entertainment industry is only now coming to terms with the blockbuster becoming even more important, economists predicted this outcome nearly two-decades ago. Cornell Economics professor Robert H. Frank and current Senior Associate Dean for Faculty and Research at Duke University, Phillip J. Cook, argued in their 1995 book, The Winner-Take-All Society, that as communication grows more individuals will gravitate towards fewer options for three reasons: Consumers prefer to spend time with the best product available, why spend time on Homefront when Call of Duty's already on your shelf? Second, cheaper distribution costs disproportionately reward large sellers. While removing shipping and packaging costs can turn an indie-game into a decently profitable venture, those same savings are multiplied when large publishers take advantage of them -- buying Battlefield 3 online saves EA more money, because rather than pass savings onto the consumer the company increases its profit margin. Third, humans are social animals. We like to share our experiences with those who can relate. I could play Dinner Date by myself and bore my friends with tales of virtual stand-ups, or I could start up my 360 and play Horde Mode in Gears of War 3 with them.

Big games name titles perform better each year, and tales of successful Indie games from smaller publishers appear in headlines each week, but the middle-tier of the game industry is disappearing, and shaking the entire industry in the process. Game developers, PR, publishers, and even media outlets like 1UP, deal with the consequences on a daily-basis. The health of the industry depends on the mid-size publishers who must innovate in order to compete with the Activisions and EAs of the world. The currently flourishing world of small-time game development can't provide the pressure necessary to force those mega-publishers to change. I love Kalypso, but a modestly successful Tropico title each year won't force Activision to innovate with Call of Duty. You can see the same process taking place in microcosm with EA's Madden franchise. With no other NFL licensed football games to apply pressure, the game's limited innovations seem to disappoint fans year after year.

While I hold out hope for the medium-sized publishers still standing, games may fall into two, broad categories in the future -- small indie titles that take advantage of digital distribution to turn a modest profit, and massive AAA blockbusters of little substance. This dichotomy is already transformed the music and film industries, it will do the same to games.

Disclosure: Before starting at 1UP I served as a contract consultant for UTV Ignition at various points in 2010 and early 2011. I have no inside information as to the company's current financial situation, status, or business plans.