Interesting feature, honestly I think Jim could stand to change his style a bit, but at the same time I think he's a bit more on the money in what he's saying than other features like "Extra Credits".
Overall he's absolutly right, however his formula really prevents him from looking at the issue overall. Making statements about how tying games and movies together is going to hamper the development of the industry is fine, but that in of itself does nothing. The people that need to be called to task are the guys who are in the gaming industry right now. Simply put the reason why they are so attracted to the whole "Hollywood" image is because they want to make the big bucks, and also being in a visual medium with large budgets they want to try and play on the similarities to justify their own lavish paydays by acting like it's the same thing (or very similar) when it's not. Also, with those ballooning demands from developers the producers are left needing to recoup those development budgets (what the guys decide they should pay themselves for making a game over a couple of years), hence the demand for increasingly casual games, and things that appeal to a wide audience, movies are something that have a widespread following among the lowest human denominator and make tons of money, so it's not surprising that the producers want to tap into those similarities especially with developers themselves acting like the gaming industry is a lot bigger and more entrenched than it is, and themselves using Hollywood as an example to justify why they should be able to pay themselves that much.
Simply put, the gaming industry needs to break out of it's current course, and that means that people within the industry are going to need to tighten their belts and realize that they can't demand Hollywood-type compensation for their services, until the industry has grown substantially. Simply put the issue isn't so much about the movies, but the industry becoming too big for it's britches, and trying to justify itself through analogy.
It's important to note that when I talk about "Hollywood Paydays" I'm not talking about everyone demanding the wages of movie stars. Rather game developers demanding money on the level of grips, camera men, and FX artists and the like for their work. Of course there are doubtlessly some "idea guys" at the heads of these studios who demand lavish "star-like" payment as part of those dev budgets. On the off chance there are game developers out there with massively underpaid workers, they might want to take a look at what their bosses are demanding as their cuts from these hundred million dollar budgets.
The fact that Hollywood uses computers so much today, with CGI being used to develop everything from creatures, to backrounds, it of course leads a lot of people working with computer graphics to believe that what they are doing is on the same level, or that they could be making more money in Hollywood doing the same basic thing. From a few things I've read here and there, they definatly seem to present themselves that way, and to be honest that's based on self-deception at the very best because simply put there is a glut in the computer and information services market. A lot of people working on games who claim that they deserve this money because "they could go elsewhere and make more" need to be reality checked because they really couldn't. Even if some did, there are only so many jobs for that kind of thing (and most of them are already held). Like it or not, they are where they are because it's really their best option, and they need to start accepting that a dev team splitting up a hundred million dollars or more over a couple of years is really pretty ridiculous.
Once you start getting out of the Hollywood mentality with the devs, I think it will affect the producers, quality won't change (all the same people will still be working pretty much), and more time can be spent on focusing on the development of gaming as it's own medium rather than trying to hitch a ride on the coattails of something more established.
Either this happens, or the current mentality continues, the games industry continues to be a "second rate Hollywood" both in mind and in practice until it crashes after producing tons of lame "interactive movies" like died out at the dawn of CD Rom, and we have to wait for another resurgence to see if the next rise of an industry gets it right.
I will say at the conclusion of this increasingly off topic rant, that I think that the gaming industry DOES have the abillity to become an entertainment industry on the level of Hollywood, and given time and enough penetration it might very well be able to justify people making this kind of money at it. It's simply not there yet, as it's still growing. Movies have a much more established audience, higher circulation, and multiple avenues of making back those huge development budgets. The gaming industry isn't established the same way at the moment, and as such it can't justify paying people that much money.
Heck, I'll say it flat out, I think gaming could be bigger than Hollywood ever has a chance of being simply because with enough time and penetration, I think we could see gaming competition reach the level of pro-sports. It sounds silly until you look at how far it's gone in some nations like Korea. If you think of what an international pro-gaming market could bring to the table, along with Hollywood-level penetration of general gaming entertainment and yeah... the money to be made there is crazy. We'll never see things get there though if they wear out the golden goose by demanding too much of it bfore it's developed.