The big guys would feel it too though. A worst case scenario would take no prisoners, and the thing is a worst case scenario isn't that far off.
The current state of the industry has made it tough on publishers, which in turn has hurt the quality of product. A drop in the quality of product, along with general economic conditions, brings down the very thing which has made the industry so strong in the first place...
And that is: consumer demand and consumer interest.
If consumer demand and consumer interest start to falter, then the whole thing REALLY starts to tumble... And that's when landscapes start to change.
I'm guessing a total collapse is pretty unlikely, because I think consumer demand still has enough power behind it to keep things going for a while.
That being said, console makers need to be more careful next time around. They need to be one step ahead of this potential disaster and make their platforms easier to develop for so as to lessen the squeeze on publishers, and at the same time make them consumer friendly as well... Meaning that they are affordable, don't break after six months, and don't rely on a gimmick controller.