Imagine what it was like to be the guy who had a great idea of a "first person shooter" when Wolfenstein 3D came out. Surely there was no point in continuing after that.
Was this sarcasm or serious?
UDK and CryEngine managed to take the game engine business that ID failed to capitalize. And not even mentioning about the games they made.
He was being sarcastic, pointing out that it didnt matter that someone came out with it first, others have had plenty of success making FPS games. Obviously.
Not just, "Had success", but took things a step further. Then the next game took it another step further, and so on.
For example, when id software was licensing out the Quake 1 (Quake 2?) engine, id paid alot of attention to the games of everyone they licensed out to. Except for this one little joke of a studio that somehow wrangled a license because someone inside the company liked them, and id software was as shocked and surprised as anyone else when Half-life debuted at E3 using their engine... but improved in every way, making a FPS... that was better in every way.
If someone else is in your niche, pay attention to what they are doing, and find out what of their ideas are good. Also, add your own good ideas, and polish everything further than them. Alternatively, you can grow the niche to make room for the both of you, or you can make your game appeal to more than one niche by a slight shift in theme or genre or plot.