clarry: They are stupidly expensive indeed, and thus my take is a bit more cynical:
One cannot afford to make an AAA game that doesn't appeal to "the masses." Therefore whatever you make has to be dumbed down and tailored for mainstream appeal, which is fundamentally at odds with making a good game.
So, in the AAA sphere, it does not matter how much competition there is. If you're not making a mainstream game, you're not making an AAA game. Thus, IDGAF what happens to AAA companies; I'm not ever expecting a good game from them. Thus I also don't give a crap about competition. They can all get acquired by EAcrosoft for all I care.
Indies and small studios are doing lots of interesting thing, so I don't get why the discussion is always so overwhelmingly focused on AAA crap. Oh nevermind: mainstream appeal.
Maybe. I do think if devs see other AAA games or even AA games that just completely outperform them in sales they would change their tune. They may either try to mimic the best practice game (see studios trying to make their own Soulsborne-esque games like Jedi Fallen order) or see that they need to change things up and try new things.
I do agree that "the masses" also encourage the dumbing down and simplification of games though as well as the incentive to produce "playable movies." Probably due to the fact that video games have become alot more mainstream but you rarely get one set difficultly in a game anymore. Everything is open world, fancy long cinematics, and adjustable difficulty within the game. Since alot of casuals also play games, they seem to be fine with microtransactions and just subpar gameplay as long as the game looks pretty and runs at 60 fps or higher.
It is possible that during this glut by AAAs, indie studios will continue to develop so when a monopolistic crash occurs like what I suspect is going to happen in film, the video game industry itself with continue with the current indie studios becoming the new AAAs as the old guard goes bankrupt. Ive honestly played some indies that have been solid and far more enjoyable than AAA games and although there is the argument that there are alot of trash indies; that was how video games in the golden era were like. Alot of trash but alot of gold and hidden gems.
Maybe its not too bad if Microsoft continues their spending spree and just cannibalizes others although now there is rumors that Microsoft wants to pull out of video games altogether.
https://www.levelup.com/en/news/756149/Microsoft-and-Xbox-would-leave-the-industry-if-Game-Pass-doesnt-meet-this-goal-by-2027 If this happens, what happens to the studios they bought? Maybe just a bluff.