In the long term however, aggregators arise, and distribution gets consolidated. This same race is the one that killed movie producers decades ago, and indie game developers more recently.
Maybe I don't understand what he's saying here, but it seems to me that indie game developers are doing better than ever. With platforms like Steam, XBLA, and the iPhone, it seems much easier to get your game distributed than in the past. I agree that it may be more difficult to get noticed as an individual game/developer, but it seems like more indie developers/games are getting the chance to be on the level with bigger games/developers than ever before.
The problem is that these aggregators become saturated with so many options that the ability for these indie developers to build a sustainable and long-term business around these distribution channels becomes difficult.
Maybe I don't understand what he's saying here, but it seems to me that indie game developers are doing better than ever. With platforms like Steam, XBLA, and the iPhone, it seems much easier to get your game distributed than in the past. I agree that it may be more difficult to get noticed as an individual game/developer, but it seems like more indie developers/games are getting the chance to be on the level with bigger games/developers than ever before.