Thing is, we have to define "collapse." I don't think anyone is arguing that the likely outcome will be as catastrophic as
no games ever again! That's not quite what happened during the crash of '83, either. People are just arguing that if things keep going the way they are then at some point it's going to trip over itself enough so that there's going to be a mass cleaning and restructuring that will see more studio closings (seriously,
tons have fallen this past generation) and the smart publishers and developers adapting to the changing landscape.
This article is about a different but tangentially related issue and makes some great points on the subject.