Wax/Wane of Video Game Development?

In LEGO Universe news comes this post:

LEGO Universe developer NetDevil, based in Colorado, have laid-off "a lot of talented folks" reveals a now former employee. The studio has cut "over 20 people."

Only a "very, VERY small team" is retained for LEGO Universe. Numerous former staff have posted NetDevil tombstones on their Facebook profiles.

Full story here: http://www.strategyinformer.com/news/11156/netdevil-left-with-very-small-team

I'm thinking this is just the wax/wane phase of video game development. Others are thinking this could mean to the end of LEGO Universe. Historically speaking in the video game industry, developers are only held onto for a short time after the game is out the door. In larger companies, talented developers would be moved onto the next project. It's unfortunate in this case.

What this could mean for LEGO Universe is a slowdown in new content development. With the recent changes in LEGO Universe, I've been thinking about renewing my subscription.

UPDATE:
So a follow up article: http://gaming.icrontic.com/news/lego-universe-development-sold-to-the-lego-group/

Sounds like the LEGO Group bought development rights to LU and is cutting the fluff.  This could be a good thing where products are introduced into LU at the same time they hit the shelves...