Yeah, those figures are par for the course these days.
While it may not be generally accepted, the money is in the consoles with studios being given budgets that are close to eclipsing movie studios. This is easy to accept with todays console using HD graphics, 8.1 surround sound, integrated online features & friend tracking, VOIP comms as standard and using media that max out at 50GB (at the moment).
Most big console titles are built & marketed as a blockbusters in every sense of the word.
Contrary to your lead title, the games industry is the only large sales sector to post year on year profits during this global financial crisis. So I can't see it die off.
P.S As for Rockstar employing 1000 people, consider that this figure was spread across 3 different game media, PS3, XBox & PC and not to mention the ongoing DLC and online management features. Aint hard to see where the money goes or where the people are needed.
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