Being in the industry for almost 5 years now I have seen two different sides to it. The first was working for Activision. We all have heard stories and have our own impressions of the company, aka "the evil publisher'. However, putting that aside if one looks at Activision from a business view, they are a corporation. They report to share holders, investors etc etc. Not the individuals in the trenches making the games.
When an individual at corporation feels screwed over due to lack of creative control, issues with management, limited increases in salary and bonuses, the corporation simply does not care. At the end of the day they care about the value of the company. Okay perhaps saying they don't care is a bit harsh but the simple fact is corporations have other priorities than the happiness of the individual, they care about the value of the company as a business.
I don't have any data to back this up but most of the time when we hear of industry layoff they come from the corporations, such as when we hear "Activision laid off x number of people from studio y" or "EA has let go of x number of people from project y". Though that's not to say indie companies let go of people too, they do but rarely this why I think that.
Indie companies that are not owned by a corporation, such as some big names like Valve, Epic, and Gearbox and even smaller indie companies like Pop Cap (can't think of other names but I am sure there are more) seem to take more value into the individual. Without the individual no work gets done, if no work gets done, the project suffers, if the project suffers the company suffers. Again this just my thinking, not fact.
So is the games industry a bad career choice, not really. I worked for the mega corporation and yes I did feel like I got screwed over, but it was easier for me to get my foot in the door there than some of the more prestigious indie companies. Once I had my fill of working for "the man" I left on my own accord to pursue what I wanted to do most level design. Now working at Gearbox for almost a year I see totally different view of how games are made and how the overall lifestyle and culture is for the development of video games compared the way of the corporation.
Overall working in games requires passion, if someone seems to like games and just wants a "job and a paycheck" yeah you are going to feel screwed. If you come in to work everyday ready to rock out the next level or code like never before then making games becomes awesome. However, it's human nature to become tired with what one does even it is awesome and even if you have the passion for it. And when that happens a person always has the right to move on to what they want to do.
Though we are talking about the games industry, things mentioned in that article occur in other fields as well. I have had friends that worked in IT for different companies. Some of the horror stories I heard from them about their jobs made me happy that I choose game design over data base programming (which I went to school for). But then I have heard stories where some of my friends landed decent gigs in IT. It all depends on the company's motives, principles and business practices.
Though one last thing I will say, not just in the games industry, but any industry if you feel like you are being screwed over voice your concerns. People are around you will never ask you if you are being screwed over, nor will your bosses. I voiced my concerns but given the way the company was run my concerns could not be met, so I quit. People have the right to move on when their needs and desires are not fulfilled at their places of employment.
Hopefully this all made sense....
I Agree with Brizz.