You can easily have a moderate hit and then go out of business before you can complete the followup game like Looking Glass did (or sell out to Microsoft a la Bungie).
LGS fell down because of poor management. Any company that made Thief or System Shock and still went down the drain had no idea what the hell they were doing.
They cancel a lot of games because they lack "hit potential"... not that they're bad games, they just won't be hits. And unfortunately in today's climate, it's units sold that rules the day, not making great games.
Because we all know that making any sort of money or living off the industry is such an evil wicked thing. EA, while having questionable support, does make great games. NFS series is one of the best racing games out there in the market, along with their F1/Nascar games. Let's not forgot their sport franchises like Madden and NHL.
If a game sells well despite your opinion on the quality, why change it? Don't fix it if it ain't broke.
So publishers need hits, and they believe the best way to get a hit is to either make a game around a hot character, usually from a movie or sports (getting tired of hearing about "franchises" yet?), make a sequel to another hit (plus you already have a lot of the work done for y ou, just reuse art assets from the first game), or make a clone of someone else's hit (which is how ou end up with YAWWIIG).
Welcome to the world of business. Franchises, brand names, and sequels all sell. That's how business works. Maybe in your utopia, things will be different. In reality, those things sell.
Of course a publisher is going to need a 'hit'. People are in this business to make money and support themselves, not so you can spend cash that you earn in ONE DAY at some minimal wage job and play around all day. They want money because ..hey, they want a living. Gamers are such greedy bastards.
This is also why more games are being produced for consoles first and PC as an afterthought: there are a hell of a lot more game consoles out there than dedicated gamer PCs, and console games almost always sell more titles than their PC counterparts. Games made strictly for the PC will tend to sell fewer copies, and below a certain point just aren't worth the investment.
No argument here. The console market is much more mainstream and friendly to the public, unlike PC. You don't have to worry about dozens of bugs and you don't need to upgrade every few months.
The days of small focused teams making games that they want to make seem to be over, and the current crop of uninspired, unoriginal, un-FUN games seems to be a symptom of that.
Where have you been? There is lots of games out there made by small groups that are popular. Uplink? Starscape?
Hardcore gamers are such whiners. Next thing you know, you are going to start telling me some shit like "Atari were the days when programmers cared about gameplay." No, its what they had to work with at the time.