I think that once Activision puts out multiple CoD releases per year on the consoles then we'll start seeing the market react negatively to CoD. The problem with Guitar Hero was that we were seeing multiple releases per year with 2010 seeing DJ Hero, Band Hero, Guitar Hero 5 (all of which cost a lot of money with the peripherals) plus multiple expansions (which was charged as much as a regular game). Too much in too short a time frame. I think we'll be seeing the same thing happen with Skylanders rather shortly.
With Call of Duty on the other hand, it's not so bad with one release per year at $60 a pop. But when you start putting out two/three/four $60 games per year, yeah, that's when the market will saturate.