Agreeing with Kajima, I'll expand on it and try to outline it for people as clearly as simple:
Third parties fucked themselves. Almost every third party expected a repeat of the last generation where Playstation sold the most and Xbox and the Nintendo system would be in a distant second. Only difference was this time around they could only lazily port over to one system instead of two. So their excuse was to develop their main IPs primarily for the HD systems and just give lazy, sloppy half assed games for the Wii.
So what happened? Well the writing was on the wall when the 360 launched to slightly better than the original fare. Then when E3 rolled around the infamous "599.99" number was dropped should've been the moment the people in charge of these companies opened their eyes to reality. The demographic that bought the PS2 in (then) record numbers weren't going to be able to afford a system that for a majority of people is a month's rent for them. Kiddies and teens would be unable to get it.
But by then it was too late since games take years to develop and understandably the first year of PS3/Wii had pathetic third party support.
Then the gaming press and the vocal third parties tried to make a stand against Nintendo in some act of artistic defiance. The Wii couldn't display the best graphics or have the most processing power and their games were inferior because of it. Nintendo was doing a disservice to their consumers! So that small minority within the industry bitched and barked up a storm as if anything they said could change reality.
As history shows, the majority of consumers don't give a fuck how many polygons are on the screen or what the resolution of a game is if it's fun. The fact that the best selling games for this generation are going to be Wii Sports/Play/Fit/Kart/NSMBW is a testament to that. This gave those bitter about the situation more to be bitter about. How dare these colorful, simplistic and accessible games outsell their high definition, uberly-epic man-dude brofest games.
So instead of changing direction to go with the flow of what I will refer to as the "new era" of gaming, third parties decided to try and fight it as desperately as they could. The Wii is a fad! People will only buy it for Wii Sports and then put it in the closet! No core gamer can be satisfied with just a Wii! These were all common mantras for the rebellious group.
However it seemed not everyone at these companies were completely brain dead. Some of them realized that they might be able to cash in on this unprecedented phenomenon. So companies decided to release rushed, second/third-rate projects done by second/third-rate teams.
Capcom experienced success with RE4 Wii and decided that it would be best to follow that up with two lightgun style games using the RE brand to sell it. Why the fuck would anyone who's a fan of that series want to go and rush out to buy a game like that? Namco, how did they reward the company that helped them sell the most successful Tales game in the western hemisphere? By sloppily pushing out Tales of Symphonia Dawn of the New World, a game that bears little resemblance to the original game on the Gamecube aside from name and the world setting.
EA? They still can't figure out a way to make their sports games for the system aside from Tiger Woods. Then they decide to develop an on-rails shooter game to a brand new intellectual property, to which Wii owners did not receive originally. Why would consumers give a fuck about this game when the original and inevitable numbered sequel will appear on an HD system?
Sega tried but honestly, a game like Madworld would've been ho-hum on any system. Releasing a black and white only game is just not a good business model.
I could go on, mentioning the complete lack of support from Konami, Square-Enix, more mediocre bullshit from Activision, the lulz-worthy support from Ubisoft (anyone remember the "Nintendo-like quality" that they announced years ago?) but really, you should get the picture now.
Third parties gambled initially on the Playstation and Xbox brands and got caught with their pants down at the beginning of the generation. But when sales of the Wii every month continued after that initial holiday period, nobody in the management positions decided to try and turn things around. Instead the plan was to bitch and moan that they couldn't sell any good games while releasing crap like Dead Rising: Chop Till You Drop, Dead Space Extraction, RE: DSC, Tales of Symphonia: DotNW, Spybots, etc. Then when those games fail to sell they try to point the finger at Nintendo and the Wii consumers. What they fail to realize is that the game industry is not one where you can blame consumers if your product fails. Creating the game is only half of it, making sure it's marketed well and aimed at consumers is the other. But of course, that would require taking accountability and responsibility for poor business decisions and it's much easier to point fingers at everyone else. Things would be completely different if say, Square-Enix were to release a numbered Final Fantasy game on the Wii and it bombed or Capcom made Resident Evil 6 for Wii and it sold like shit.
Unfortunately for them, that doesn't fix their problem. In any industry, if you do not adapt, you die. My advice to third parties is to shut the hell up and start making some premium, tier one games by their top teams for the Wii or pray that your HD versions sell well enough to float your company. Because right now they've lost three years worth of potential sales due to ignorance and stupidity and are only damaging their brands in the minds of the Wii consumers.
With the way the economy is today and the fact that it seems every year studios are closing down, getting absorbed or laying people off, you'd think they'd want to try and do their best to make quality games. By the end of this generation we're going to see a lot more companies disappear or get bought out and it really makes the general future for most third parties very bleak.
Stealth edit:
I'll just add that the console system for this gen is playing out almost exactly like the handheld war did. Everybody hopped on the Sony PSP hypetrain because its specs were ridiculous and on paper it totally trounced the DS. But as the weeks and months rolled by and more and more quality software came out (Nintendogs, Brain Age, Mario Kart, Pokemon) the DS just kicked into high gear and left the PSP in its dust.
