Sunk cost usually, you don't set out to make a bad game but making games is hard and usually only become good in the last few months after you have already spent a lot of money. As they say the first 90% is the easy part, it's the last 90% that is the hard part.
Things like licensed games are a different beast, most of the resources goes into the license usually which leaves very little for actually making a game but the do it because they believe that the license will sell it by it's self. And a lot of the time that actually works, or at least it did, that market has largely dried up which is why THQ isn't around anymore. Atari had a lot of success before they invested into E.T. it's just a shame that they only bothered to pay 1 guy to actually make the game in 6 months after they had spent tens of millions on the license and manufacturing millions of carts.
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