I wrote a while ago about my belief that fewer, (and preferably higher quality) games on the Wii would result in better sales and performance for the third parties involved. Now, i'm beginning to take what i wrote even more seriously following a post from an iPhone game developer about how he'd made $535 on an investment (including his time) of $32,000 for his game, Dapple.
The iPhone has only been out since the end of June in 2007 and already there are 6000 games available on the App Store. That's essentially an 'infinite' number of games to trawl through (though only 17% are in the same genre as Dapple) unless you specifically know what you're looking for. Now, it's not like this is new to the gaming industry and in fact this problem is well known in the hotel/B&B industry (books, film etc), but there are three ways to get around this aspect of proliferation:
1) Produce fewer games (or only allow a limited amount each week).
2) Learn to effectively market your product.
3) Learn to 'monetise' your games effectively.
Number 1 just isn't going to happen. Apple are as greedy as any other company and won't want to halt the headline generating number of games available on their store.
Number 2 is difficult. You need to create a critical mass of reviews and public advertising for your product just before it is released and then capitalise on that pent up interest and curiosity. Further along you need to remind the populace that your game exists and this can be accomplished through re-advertising campaigns, sequels (and thus the link to the original game) and word of mouth which can only really help if your game is a runaway success - such as is the case with the DS and Wii. Keeping the game on lists (as the developer mentions) can be key to remaining in the public eye. It sounds like the guy at Streaming Colour Studios has learned this lesson and will be improving his marketing accordingly.
Number 3 is an interesting exercise and can pretty much come in any form. The best i've heard was on the recent podcast from GamersWithJobs where it was suggested to the resident iPhile that a subscription service which offered a random (not repeating) game per week for a fee (like a recurring rental service) would be an excellent way to sift the wheat from the chaff. This would not necessarily bring in the megabucks to the developer on its own but when that game is featured i'd bet there would be a related surge in sales numbers.... though i would not like to bet on by how much.
Ultimately the game companies (Apple, Nintendo, Microsoft and Sony) need to sort this thing out otherwise they're going to end up with an indeciferable mess on each of their respective platforms. The only thing that currently saves the market is the console refresh every 5 or so years, meaning a blank slate can be slapped on top of the mess. Also, for previous generations there wasn't this proliferation of DLC or downloadable games which meant that there was no need or cost associated with keeping that content available for all users, even after the console has been discontinued (which i think will be a big disincentive to transfer to the next console generation aside from the monetary loss incurred from the horsepower battle that ensued between MS and Sony).
We've seen Microsoft come forward and say that they'd start removing games from Live! Arcade but so far i don't think this has happened in any meaningful way and this is probably down to an outcry from publishers/developers and users when it was first touted as a way to clean up the lists for sale. Since then there have been no other suggestions as to a solution to this problem and it's fast becoming the white elephant in the room. At least with physical copies there is a shelf life and limited number of copies in existance... for a digital copy there are unlimited 'items' available and, because of DRM, the 'original' needs to be kept for the customers to be able to redownload or reference if their copy is lost or corrupted.
DRM discussions aside, this is one of the reasons why i try not to support downloading games. At some point there is going to be a planned critical loss of information as we move from one platform to another and i do not want to be a part of that.