"At a time when people are bemoaning the fate of the interactive entertainment business..."
What people are bemoaning this, exactly? After several years of articles about how the video game industry was out-grossing the movies (as misleading as that data point actually was), who is claiming this? Other than the head of Take Two? I think what he really means is "at a time when people aren't nearly as motivated to spend $60-$90 for a new release console video game", perhaps. An industry that has grown by 10% from 2005 to 2009 and sold something like $22 billion in 2012? I'm not seeing some doom-and-gloom scenario. Especially as it is something of a golden age for the consumer, especially with services like Steam bringing frequent sales.
The article also mentions there being fewer games being produced? By what metric are they measuring that? Are they only counting console games? Yes, 2012 had a tumble, but 2013 has completely rallied from that point. The main reason sales tumbled in 2012 was fewer releases that year and franchise fatigue as companies like EA are so dependent on annual releases that consumers are starting to opt out.
The video game industry had a decade of unprecedented growth and now it's leveling out. That's really all that's happened, from what I can see.