When it comes to games, you need to be recognized before making a bad game will hurt you. "Pissing off the source of your cash flow" is only destructive if they can remember your name to hold a grudge. At the same time as you need to be recognizable, you need to be known for moderate-high quality but not super high quality. Companies like Nintendo are good examples of this as people would quickly forgive Nintendo if it turns out one bad game among its vast library of great games. Wheras companies like Sega are good examples going the other way. If they make a game that's only decent, it's labelled as bad.
As for "AAA title" frequency, higher is better. If a developer only needs 2 years to turn out a quality title then that's what they should have. If a developer needs 3 years to churn out a quality title but only gets 2, then it's not a quality title anymore. All of this is usually dictated by money however so don't expect things to change very quickly.
