There's other variables that his estimate isn't accounting for, and also doesn't include sales numbers for digital copies.
That and I countered his estimate with basic common sense - if what he's saying is true, where even highly-regarded, well received games that sell millions of copies are considered "failures", then the game industry would have imploded ages ago. The fact that video games are still made shows that there's something wrong with his numbers.
"Hollywood accounting" works the same way - sales figures can be manipulated in such a way that it's a "valid" interpretation that a movie was a total failure, but that doesn't mean it was actually true or even makes sense.