Yusuf Pisan teaches a game development related course at the University of Technology, Sydney, and has an interesting blog entry touching on the number of graduates vs the number of game developer companies that can absorb them..
"OK, so there are a few companies... Not so many! Now do your sums on how many new students leave universities in Sydney that want to one of those positions. Add graduates from outside of Sydney to that. Add specialised schools such as AIE, AIT, etc. Add the number of people who graduated not just now but the year before, as well as people changing jobs..... That is your competition. Too many people want to be in games, it is a bubble. If you want to stay and fight, you should find a different tack than getting an entry level position."
It is a rather bleak but honest look at things, and Yusuf does give some helpful advice on what to do if you're in the hunt for a game development job like everyone else. I think Yusuf's blog further reinforces my opinion on the importance of the role that Next Wave's Independant Game Developers Conference has to encourage students and others on a different avenue that will hopefully create new jobs in the long run..