The problem they describe will self-correct; the “market” will drive that. But it might not be pretty. The things below are already happening, but will be further instigated:

New AAA non-franchise titles will be less common because return is less likely amongst the sea of new games coming out. Investors will continue to gamble on them, but they’ll be fewer and further between.

Mid-budget AA games not in a niche will disappear. You’ll still have your city builders, your milsim squad shooters, your competitive RTS games, but you won’t be seeing many new AA action platformers, multiplayer CoD style shooters, block puzzlers, adventure RPGs, etc. They’ll either be bare budget / indie or mega budget.

You’ll see dev cost continue to be driven down to mitigate this risk, making quality suffer. Asset flips, AI, and outsourcing will increase for most studios that don’t get recurring revenue from live service games.

Indies will continue to be random breakout hits, but their studios will die fast because followups to their breakouts often drown in the sea too.

Being an employee in the industry will probably mean jumping from company to company where you might only stick around for 1 - 2 titles before a major layoff. Contracting will get more common.