That video was released on Gametrailers December of 2011. I think it's two factors.
AVGN: The Movie began filming in April of 2012, and fundraising had begun well before that point. He already had his eyes and attention firmly set on making the film when Bible Games III came out.
Interestingly, his first daughter was born April of 2013, meaning that she was conceived in mid-2012, not long after the movie completed filming. They probably had reached an agreement that they would start their family after James made his 'masterpiece'.
I think he believed his movie was going to be received a lot better and launch him into legitimacy as the director of a cult classic film. It would have been the perfect stopping point and sendoff for the character. When it flopped amongst general audiences and fans, he was very much pigeonholed making internet videos the Nerd, and provided him a staunch reality check. Deep down, he knows it wasn't what he wanted it to be. Not to mention, the health complications with regard to the birth of his daughter.
Now stuck with the pressures of providing for a growing family with a dead end career making poop jokes as the character he lost all passion for, and a constant reminder of his dreams being crushed. It lines up perfectly, and very much explains bringing onboard those fucking untalented losers to run things. He doesn't need quality, he just needs Nerd videos so he can draw a paycheck and make a living.
He's a man who's had his dreams crushed and lives with a massively-changed, nearly unrecognizable woman who runs him ragged since the birth of their daughter.