Is the Gaming Industry Crashing?

Yea - I have a business education so I do know why those departments exist. I'll paraphrase a friend of mine "if you think that you can tie your shoelaces well with two hands, imagine how well you could tie them if you had two dozen hands".

For the exact same reason units like SEAL or SAS exist and operate very small teams - because, more is not better, not always. Anyone heard of the british vs. norwegians polar expedition race? The norwegian team had around 10 men, the british thought that 100 men is more than 10 and more is better. One of the expeditions never reached their target.

When we're talking about product development, we arrive a zone where one guy can be 100 times as efficient as another, possibly more. It is a field where a single man can make a game that sells 10 million copies and a team of 50+ with multimillion funding can make a game that is simply "meh".

Some of those big companies... I'm afraid that they operate in the same manner as old soviet government services. A ferry operator comes to work every day, despite the fact that his ferry sunk 10 years ago. "They neighbor company has a personnel department!" - and you setup a department and hire people to work there and there's nothing worthwhile to do.

So yea- I think we're on the same track. I think business clusters are the way to go. There is one company that knows all the good workers, there's another company that specializes in copyright law, one company specializes in accounting etc. And your company specializes in making good games and you can hire the best company that you can afford to do what you need them to do - and that's that. You don't need to have dozens of people mainly to act as a justification for an oversized development budget which will force you to look for lowest common nominator and prevents you from lowering price.