32,000 current / 50,000 former game developers
The author of the Lost Garden blog writes about why he left the game industry and brings up an interesting point.

In fact there are more lapsed game developers in the world than there are current game developers. Let’s look at some back of the napkin numbers. The average career in the game industry is 5 years. With 800 mainstream games a year and an average team size of 40 developers, we have a rough population of 32,000. If 20% leave a year, that’s roughly 6,000 new lapsed game developers every year. Over the past decade, that rapidly adds up to 50,000 or more lapsed game developers.

I find that to be amazing. He then also says that thats not including the smaller shops that have a much higher turnover rate. He's a programmer so I'm not sure if this is more talking about programmers or if this counts for artists as well.

But here is really why I think game companies are such horrible places to work 95% of the time. It's because many games and game companies are started by people that don't understand the business. They know how to make a fun game but they don't understand the business. I've thought this for a long time and that is that EA is full of smart people who understand games better than anyone else. There is a reason why 40% of my game collection are EA published games. It's not that I love all the stuff EA puts out but it's that the best stuff EA has. Game creators hate EA because EA doesn't take huge risks. You wont see EA publishing some fringe game. Why? It's way, way too risky. EA knows how to pick winners for games and understands the business of games.

From GDC, Seamus Blackley says in a panel...

You go to the Fairmont. You hang out, have a coupla 9 dollar beers. Pretend that you like the guys who screwed you 6 years ago at some other company. And you hear a whole bunch of people bitching and moaning about how their awesome games aren’t getting published by those jackass publishers who wouldn’t know a good game if it smacked them in the head. I used to really be into this.

Now all I can say is let’s just stop fucking ourselves and realise what’s happening here. We don’t HAVE a good business around most of the ideas we wanna make. We can’t go to guys like EA who, incidentally, are really smart - and present them a business case for some of these ideas. I made a decision about 2 years ago to wear a suit and tie every day. I guarantee you that you can feel the IQ flowing from your body down the tie. It’s all down to sacrifice. But I went there because I thought we might be able to hack into Hollywood a bit, help the game biz. In fact, Ted Price can give a talk at DiCE about finance, and I’m talking about off balancesheet financing. That was a great moment in my career but I’m not bitter about it.

Most major games are only successful if they sell one million copies or more. It doesn't matter if they have a great story line or if they involve the player well. If it doesn't sell that many copies, it failed and the investors will lose money, the publishers will lose money and many other people will lose their jobs.

Any investor who puts his money into the development of a multimillion dollar game is well aware of the risks typically and will remain paranoid all during development, ready to jump ship as soon as anything starts to go wrong. This cramps the developers of the games who are no longer able to create games that will perform to their potential.  ¶ 8:06 PM