Larian's Swen Vincke on "Seeking the Golden Path"

Larian Studios' Swen Vincke has been putting out some great blog articles lately on all manner of subjects. This week's article is about why Larian are still competing in the "triple-A" category of games, when competition from significantly bigger developers and publishers is so fierce. It's actually a pretty interesting look into the realities of doing game development at a smaller studio - namely, how they have survived going "whole hog" into big-budget development while still remaining standing.
But that's the past, and the question our journalist friend had was about the immediate future what indeed are we thinking, continuing to make games when there are such apparently fantastic games like Far Cry 3 and Watchdogs on horizon, paid for by the Canadian tax payers? Shouldn't we crawl in a little corner and slowly fade away faced with such brilliance?

One obvious answer is that there are different genres, with each genre having a different audience, and as long as the audience for our genre is there, we'll continue to be. I for instance won't be playing Far Cry 3 as I don't like first person shooters. I probably won't play Watchdogs either, as it looks like an action adventure to me, and I'm no big fan of how they make those nowadays. At best I'll look at these games out of professional interest, but it'll be for work, not for fun.

But what the journalist meant was of course how we were going to deal with the technology angle. He looks at those trailers and demos, sees visual delight, then looks at the games of smaller developers, and decides they are no match for what the big boys are showing.

Yet, there's nothing I've seen technology wise in those videos that my team couldn't pull off, provided they'd have access to the same budget. What's impressive about those videos is how much work went into the content of those games. It's really a matter of the amount of people the developers of said games put to the task, and in the cases quoted, its apparent there were a lot of people working on thisy. But, given the same budgets, it's possible (and in my humble opinion even probable) that we could even do better than what's on display. After all, there's a lot of persistent rumors that there's a lot of waste going on with those Canadian tax dollars.
It's also interesting to see that Larian have become somewhat of an icon in the RPG community lately after the newfound success of Divinity II via Steam, and the upcoming Dragon Commander and Divinity: Original Sin. Even as Larian work on their new titles, is it possible they're slowly becoming lower-budget, more niche developers without necessarily admitting to it?  Or is the RPG market seeing a resurgence as players no longer find themselves craving the highest-grade production values?