While I couldn’t agree with you more, there’s another side to this coin. Increasingly, the PhDs are finding research topics to focus on that are simply chosen for their press appeal. Example:

http://bostonherald.com/business/media/view.bg?articleid=1248029&position=0

If you venture in and read the paper, you’ll find that the Conclusion section is far more intelligible:
“This paper has proposed a theoretical framework for studying competition between differentiated products, when consumers are interested in purchasing more than one brand.
Indeed, the two classic frameworks for studying monopolistic competition – based on Salop
(1979) and, respectively, on Spence (1976) and Dixit and Stiglitz (1977) – do not seem adequate
proxies for markets such as those for software applications and videogames, which
combine features of both models, most importantly product differentiation, heterogeneity of consumer tastes and consumer preference for diversity. Accordingly, our model generalizes Salop’s circular framework by allowing consumers to purchase more than one variety.
The case in which consumers buy all products offering net positive utility is not very
interesting, as there is no competition among firms, so that each behaves like an unconstrained
monopolist.”

Interestingly, this is what a graduate class professor at USC pointed out to us as “commoditization”. The point being, that when items reach commodity level, the pricing strategy becomes purely economic (i.e., lowest unit price dictates the choice). The author of the paper being critiqued here seems to have gone to great lengths to point out that video games are not commodity items, that is, they each have a unique appeal.

That explains demand for Rock Band and Guitar Hero quite well, IMHO.

Consider that 50 years before it was needed, Ernst Mach was doing basic research in supersonic airflow. Basic research must be done, to understand the physics of any problem, well enough to design an application for that technology. Thomas Edison was an idiot, plodding along, trying 1000s of ways to do something, without eliminating obvious dead ends up front. Only the garage hobbyist can afford to waste the kind of time and resources Edison did.