Microsoft’s videogame chief Shane Kim came by our New York office this morning for the Reuters Media Summit and shared his thoughts on XBox 360 sales (“cautiously optimistic”) and the outlook for the gaming industry amid the economic doom-and-gloom (“Who knows, maybe flat performance will be considered a remarkable achievement”).

He also gazed into his crystal ball and served up some insights on the trends shaping the gaming business.

Consolidation is going to continue, he thinks, especially among the smaller videogame publishers as they search for hit games while keeping costs in check.

“There are a number of mid-tier publishers behind the Electronic Arts and Ubisofts and Activisions of the world who are struggling.”

Another exciting trend for Kim is the return to videogame content developed by small creative teams, which he thinks could reduce the industry’s dependence on sequels of hit games.