The main reason why most publishers are struggling is due to such heavy competition by 1st party publishers to get console acceptance.
Originally $20 Billion would be fought over by EA, Take 2, Activision, THQ, UbiSoft and other 3rd party publishers. Maybe $1 - 3 Billion would be for 1st party publishers.
Now $7 Billion - $10 Billion is being taken in by 1st Party Publishers. As such, the 3rd party publishers are left with scraps to pick.
What happens? the shovelware developers get axed (and axed fast), i.e. EA & THQ.
With regards to profitable games, Take 2 takes the cake, easily. GTA IV, even though costs $100 Million to make has generated Take 2 ~$200 Million profit.







