The product of this style of production is most often called a "vertical slice." A slice of cake has just a thin amount of cake, but it contains every layer of cake. In this analogy the cake is the whole game and the vertical slice is a tiny snippit of the game (ie. a short level) where all features (every layer of cake) of the core functionality of the game is present.
That's exactly what I was going to say. Even the terminology, "publishable first playable" echoes the "minimum viable product" terminology that's in vogue with lean startup practitioners.
Agreed, and to their credit both are designed to solve the same problem which is to maximize the likelyhood that you're spending the money on the right thing. Long gone are the days when some decides to plop down a million dollars to make some random game, that will be first seen by customers when it is in the retail box.
I had the exact same thoughts while reading the article. Cerny created MVPs of games, got feedback and would pivot/change based on user feedback. And he did this in the mid 90's!!