Dev studios / game companies that went from mediocre to good and beyond

[Trunkin]

CDProjectRED. Witcher 1 was alright, 2 was good, 3 was amazing.

I would almost say Naughty Dog, but I don't think Uncharted is really any better than Jak & Daxter. In terms of critical and financial recognition, they've been getting better and better, though.