Re B-games: Eh, he's on to something, but the unspoken yet hugely important variable is the price point here. The reason B-movies existed back in the day was that they were cheap to produce - you've got this set lying around and actors on contract, so you dang well better be using them, and fussing about with a script and expensive effects isn't in the cards. More generally, the price points you want to set are "you pay less for the game than you can sell it for." B-movies could be sold at mostly the same cost as a real movie, but cost a fraction to produce. If the fraction of the audience you get is still commensurate or better, you're still making money. (Alternatively, things like Republic serials could be value-adds to the real movies, and have a price point of near-free since you'd see the serial before the movie.)
So... thinking of it in terms of price...
High cost, high return: World of Warcraft, Halo 3, Metal Gear Solid 4, etc.
Medium cost, medium or better return: Wild Arms 4, Nippon Ichi games.
Low cost, low or better return: "Free" MMORPGs, Wii crapware games.
Very low cost, very low or better return: Flash games, downloadable content.
So... if B-games he means games that ignore having overly flashy graphics to just crank out a decent game but charge a bunch for it, then he's definitely onto something. The dream is to release something like Disgaea, which is cheap but became a big seller anyway. Still, if your game is cheap enough, it doesn't have to sell much. Or for real cheating, there's something like Final Fantasy X-2 which was cheap yet tapped into a franchise and had huge sales. Then you have your Heavenly Sword type deals which are really expensive to make, and really need to be a success or else risk sinking your company.
Much as I don't like some of the aspects of their games, Nippon Ichi is probably the best example of doing what I'd imagine as being a B-game; NI caters to hardcore fans who are willing to forgive dated graphics in exchange for a certain brand of humor and gameplay. I'm sure there are equivalent publishers for medium-quality action games. The Wii itself is definitely on this train as well; development costs are way lower when you can't tempt yourself into trying to have the absolute most cutting edge HD graphics. I can't imagine that Sony spent THAT much on Wild Arms 4, but all it needed to do was be a modest success.
The idea of having intentionally subpar gameplay is asking for trouble, though. Even flashgames need to have good gameplay if they want to be successful. But I'm not sure that quality of gameplay is always necessarily correlated with the budget dedicated to a project, though there are counterexamples I'm sure, and it's the budget part that will make companies interested in making a "B-game."
