The first wave of bad news

Lots of axe-weilding around the games industry, and in the tech industry in general. A few recent examples:

EA lays off 6% of workforce

THQ plans reduction of 250 heads

Brash hit by layoffs, cancels titles (not surprised, given their initial titles' poor reviews, which seem to stem from an attitude of "hollywood license + low quality game = ok", as others pointed out when they originally announced. Guess you can burn through $400M pretty quickly these days. Fools and their money, etc.)

Wild Tangent closes internal studio, cuts staff

Avalanche lays off 77

Google will give you plenty more examples. 

Unfortunately, i think this is just the battening down of the hatches. The real trouble comes if people tighten their belts a notch or two this Christmas, which I expect will absolutely happen. After that we'll likely see another wave of layoffs.

So much for 'recession proof', which was crazy to think anyway.

Shitty times. And I think it's going to get far worse. The layoffs in other industries have a ripple effect on people's spending; budget clamp downs in all industries are going to cut advertising budgets, which are a big part of the casual games business, etc.