Ian, we're laughing because it's another bankrupcy in the age of HD. Not because the devs picked illogically back in the day but because people are still proclaiming that better graphics are the way forward and Nintendo's lower graphics were just used to prey on the ignorant masses. We don't cheer for the demise of a specific developer (though they were mostly a tech demo company, their gameplay was always the weak spot and the games were buggy), we cheer for the failure of the prediction that graphics are more important than improving the user interface and accessibility of gaming. We cheer for the implosion of the era of the cinematic epic with the hope of games becoming more focussed on interesting gameplay instead of crappy movies.
You know, I was thinking about this last night.
There are far too many cases of studios shutting down and firing employees. I figured the reason why is that they are spending too much money making epic games for HD consoles and seeing very little profit, even if the game is considered a success. Then there's marketing, release and manufacturing. Combine all of this and gaming can be pretty damn expensive to make.
Before Ian comes in and says "Yeah, well developers can lose money on Wii too" its a proven fact that developing for the 360 or PS3 is expensive. Their development kits cost far more than the typical Wii kit, not to mention that they have to modify the textures in order to fit HD sets, and for that to happen they need to buy HD engines, which I take is also expensive. Add development time, payment for all the employees working on the game and the other stuff I mentioned and I can see how companies seem to be closing left and right. Too little profit being made, even if a game manages to sell millions.