Very good episode.
However, I think the problem was less about fear and more about greed. Yeah, JRPGs and survival horror and other such "niche" markets never really stopped being successful, but the problem was that executives at Square-Enix and Capcom and Konami, etc. all saw "Halo" and "Call of Duty" making way more money than they were and deciding that they could be just as successful if they did the same thing. Rather than remaining content with the modest success they were enjoying, they decided to try and out-Call-of-Duty "Call of Duty", and as a result, they alienated the market they had and reported losses.
One peculiar upside to this, however, is that this environment in the AAA industry is pretty much what allowed the indie market to gain as much appeal as it has. The timing was just perfect for them and there was basically no competition from the AAA industry. Additionally, the lack of AAA niche titles has made people so hungry for this kind of game that when they do get around to making a AAA niche title, people will absolutely devour it. Like with "XCOM: Enemy Unknown". I love that game, but if it came out in a market where that kind of game was more commonplace, people would have torn it to shreds for its abrupt story, its awkward voice acting, its lower-quality visuals, and its somewhat incomplete and inconsistent game mechanics. Still, since a AAA game like it hadn't come out in ages, it became incredibly popular and people couldn't stop singing its praises.
Let's hope this really is the beginning of a return to form.