The key paragraph (IMO) is:
‘The more amazing graphics and sound you put into a game, the longer it takes to finish,’ he added. ‘Not just a year, but now, more like a year and a half or two years. So then your development costs balloon, and when you finally put it out you have zero guarantee of it selling. That’s what the games industry is today.’
I agree, that race towards high fidelity graphics is one of the issues, not to mention some devs trying to make sure each leaf of grass is immaculate. On the other hand, not improving graphics at all doesn't sound that great either. So maybe we need a way to do faster development even when going for "amazing graphics".
This is a bit of a nuanced topic though, since even with all this, games have been doing pretty well, companies are making record profits, but they are still laying off thousands. So maybe issue is more with the expectations of the corporations than with going for amazing graphics.