Unfortunately this is just the invisible hand of the market at work. I only say this because I believe the market that these companies are catering to (us) simply do not need all the games they are trying to sell to us. Think about what a video game reviewer is feeling right now, in the midst of this holiday season, when he is being sent a mountain of games that he is going to have to slog through, without the time to actually enjoy playing them at all.
To be able to support this there must be enough people with enough money and enough desire to buy all of these games. Let's say that we don't blame the economy for a second, and look at the bare bones of the situation: even if you had the money to buy all of these games, you wouldn't have the time to play them. Honestly, I personally can only play 4-6 hours a week, and I play to enjoy them, not to power through to the next one, so there are literally hundreds of games ill never have the time to play. Even if you are a "enthusiast", how many games do you need? How many of you haves piles of games, never finished and some never even unwrapped?
What was the purpose of those games existance? They were meant to be played and enjoyed, while hopefully making money for the people who developed and published them. Obviously the publishers /devs care about the second part of that sentence, but its the first part of the sentence that makes the second part possible. By piling games onto us, each one is a little less special, especially in a industry that is primerly derivative (sequels, and me-too games) which only compounds the problem. What you end up with is an audience that is largely apathetic to anything that isn't good AND insanely hype-driven or remarkebly different. Its a shame that Blur didn't sell well, but it probably shouldn't have existed considering we already have plenty of other racing games that have already beat it to the punch and while I know that blur has kart elements to it, it is still a racing game. I am not everyone, but I doubt I could tell the difference between a Blur/splitsecond/Need For Speed screenshot.
Personally, I hope that people stop losing their jobs, but I think to accomplish that the industry is going to have to shrink down to a sustainable level, until developers can figure out how to lower development costs in the "glorious" HD era.