"You say it's only effective when it genuinely conveys etc etc.. But, honestly, when was the last time you saw such a thing?"
ForgedReality: That's easy. Look at how Blizzard markets all of their expansions. They do an excellent job with them. Very rarely do I feel "let down" when I've purchased one. In fact, more often than not, I get exactly what I expected and even more so (which is pretty rare I know).
For the most part, I agree with you though. There will always be people who will be sucked in by marketing hype. Yet on the flip side, once a gamer's been "burned" enough times, he or she will become much more smarter in their purchases. Over the last fifteen years, I've seen a pretty dramatic change in the intelligence of the crowds, especially upon forums, and it looks to me like it's reaching a tipping point.
As for companies still being able to make back their money on games, well that's my primary point. Yes they can do that but it only will work for so long. Once you've lost the trust and loyalty of your customers, it's pretty damn hard to get it back (unless you start a new company which is what some of them do). And as we're seeing out there with the current layoffs, just making back your costs isn't cutting it anymore.
The thing to realize here though is that a lot of what I've talked about doesn't happen overnight but slowly builds up over time until one day the games industry starts collapsing in on itself. And even that won't happen overnight but probably over a five year period.
And I'm not all doom and gloom by any means, as this collapse will be a culling not a destruction of it. I think there is a small handful of game publishers and developers who do get it and are making a noticeable difference in the industry today. Unfortunately it will still probably take a while for other companies to recognize their current practices are no longer working in the long term and they'll eventually start replicating the practices of these better companies.