In terms of fewer sequals, developers may resort to what Fumitu Ueda is doing with SOTC. It's not a sequal, but shares some common ground with ICO. Same thing with the final fantasy series but different approach, different game but same name.
I honestly don't mind sequals or the continuation of the series. I can't get enough out of Silent Hill or Metal Gear. The sequal to some games are natural as well. Gran Turismo is an example, each iteration should bring something new to the table, whether it be newer cars or new/more tracks. There will always be a need to drive the newest cars so I don't see that franchise closing down anytime soon.
But... New titles are always good for the platform and industry. I never heard of Katamari Damacy before and never really cared, but when I played it I loved it.
So I think a healthy mix of new titles and sequals would be a winning formula.
