@Louie
I just wanted to point out that "Developer A" never has $15M at all. Developer A's publisher has like $150M, and that publisher can choose to make 20-30 good Wii titles, or 10 HD titles. The all-eggs-in-one-basket situation you're describing is not really true. The developers just get paid, milestone by milestome, and if the game flops, its the publishers loss, directly, and the developers loss indirectly, since it hurts their chances of getting good projects down the road, but doesn't actually cost them money.
I think this changes the analysis a bit. It always boils down to the big picture, since the investors almost always have a load of games in the pipeline, and profiting is the publisher's direct concern, and only an indirect concern for the developers (still important though, obviously -- you don't get good contracts without a good rep).
