I'd say AAA are not extinct and aren't going to be extinct any time soon. You argue that EA lost a billion dollars (surely partly due to a $300 million acquition of a casual gaming company). I argue that a single triple A game made Activision a billion dollars. Maybe AAA games will become less, but Microsoft and Sony sell consoles at a loss because the profits from these games are so good. It's a risky business but the rewards will outweight the loss and do outweigh the losses year on year.
For that matter don't MMO's count as triple A? Because I doubt Blizzard feel that their market is in trouble?
And speaking of Blizzard, triple A games aren't even necessarily a risky proposition. Count on one hand the number of AAA Sony/MS inhouse games that have gone bad. Count the number of Blizzard games which haven't become best sellers. When did Final Fantasy not make a bundle or Madden not sell well? What you're seeing is the danger of breaking into the market, of trying to claim the peak, yet for people who are already established and have the support there seems to be very little risk.
Times are changing, but the truth is record sales are being recorded more and more frequently for AAA games, and whilst the prize is there people will seek it. Excuse me if I don't think making a crud load of money signifies the end ^^