So, what are some of the hurdles and challenges facing our favourite titles and devs, i would say new ips because were nearing the end of a cycle so nobody wants to take a risk. also games being delayed wich can be difficult.
Capcom: Making a game that's actually complete without disc-locked DLC. Or bringing back Breath of Fire or Power Stone. Konami: Actually making a game for once that doesn't have the words "Metal Gear" or "Silent Hill" on it. Obsidian: Making a complete, functional game and not blaming their game's shoddy quality on the publisher. (IE blaming Lucas Arts for KotOR 2, Bethesda for Fallout: New Vegas, or Sega for Alpha Protocol)
Development costs are going to be the main issue. With AAA games having absolutely insane budgets, it's hard to justify low-budget games being sold at comparable prices.
Yes, they got bigger than ever, for most devs though it seems to be down scalling as the decline of the mega publisher's has happened. realistically the major players are minute in numbers compared to smaller devs and with the boom in moblie gaming wich shall take care of it's self as the devices get better i think.
As far as western game companies are concerned, I think the main challenge is pulling themselves out of the giant holes of mediocrity they've been digging themselves into for the past 10 years or so.