Technically the only interesting challenge is "how do we get off Unity?"
the mismanagement stems from the fact that it is costing too much from the onset, and "management" wants to ensure that the investment makes a good enough return to justify the high cost.
Therefore, they dictate all of the risks have to be removed - such as not going for a risky new brand, but make a sequel. They want realistic graphics because it's more commercially viable - going for a different or uncommon aesthetic means taking risks.
I would argue all of the problems in AAA development stems from this fact.
it is also why indie games can be so cheap yet so successful. Not because indies are better (tho they are- at least more passionate if nothing else), but because indies are capable of taking risks to push the edge and make something new and untested.
It's the same as films - creative endeavours cannot have their risks managed away. It is inherent, and there's a large chance of failure even if the team has done their best.
What changed, I think, is all of the development studios being bought up by large producers. But, then again, I see steam as being a great counterforce on this, and the ease of releasing on web or mobile has been a boon for indie devs too. So maybe that hasn't changed that much.
The technology has advanced to where you can spend blockbuster budgets and get nearly film-quality results (not nearly possible in the cartridge and CD days). Meanwhile the price per AAA title has stayed relatively fixed at 50-60 USD for that same range of time, so production houses have had to try being appealing to ever-larger audiences. Fortunately, many people continue playing these games into their 30s and 40s so the market grows on its own too.
I'm trying to say you're right about the risk aversion being a big part of the industry's problems but that's been an issue for a while, it has gotten terribly enhanced with the growth of the industry.
Now I wonder which is worse.. extracting money one quarter a time with punishingly difficult timing tests, or extracting money via cosmetics that have no actual game impact but are marketed very compellingly.
The cheapness also means indies simply get more "shots on goal." The barrier to entry is relatively low, so failing is lower-stakes. You have way more indies trying (and mostly failing), which means you have a greater raw number of hits. That's compared to a big company only having a handful of big-budget games in development.
* Ability to do first-party console ports
* 3D rendering fidelity and speed
* Asset store quality & quantity
* Robustness & stability - they both have tons of bugs but with Unity there is almost always a way around the bug, due to the decades of commercial games that paved the path before you.
For one quick example, Godot's physics engine is well-known to be poor, both in terms of performance and in terms of accuracy/stability. It has tons of bugs, tunneling, jittering, etc. Both the 2D and 3D physics engines in Godot are currently slated to be ripped out & replaced with external ones of higher quality (Box2D and Jolt). But currently, that hasn't happened, so one of the foundational parts of most games - physics - is guaranteed to be broken to some degree in a Godot game.
Replacing the 3d engine with Jolt is on the official roadmap. If it were really a drop in replacement today, that would have already shipped.
But yes, all of my personal projects are in Godot now, and I'm planning to use it for some tooling at work, just because it's UI system is nicer than Unity's as well as it having better support for re-using editor UI components in an application.
Before their ascension there were already plenty to middleware to chose from, Ogre3D, SFML, SDL, Gamemaker, RenderWare, jMonkeyEngine,...
They aren't used as much, even the free ones, because of supported languages, tooling, asset store, platform owners support, and everything else that keeps them relevant in the industry despite their flaws.