Some companies knew those would fail. 6 months, one guy making ET. Come on, even he knew it was gonna bomb. But the company hopes for the pansies. Nowadays those people are less thanks to internet.

When you look at the numbers too much, you stop seeing what the numbers represent.

it might also be the fact that there are so many games that are this random Hit game out there that are garbage and they are hoping that theirs will do the game. Like, take a look at Minecraft. now, yes, Minecraft is a great game but look at it when it first started out. It was limited, glitchy as hell and looked like crap and it took off because of the concept and now it is one of the greatest selling games of all time. I think people just want to think that their game can do something like that, have this odd concept that will explode even though most know it won't.

If the production is really cheap, it will make a profit, no matter how little it sells.

There's also that sometimes game are bad because of glitches that we're able to be found because of limited QA budget.

Because some companies care more about money than they care about their reputation.

Cause they know that the game will make more money than the cost of development! Not very hard really, make a good looking trailer, cover up the actual game until launch and bam, you will get a ton of shit for gaming a bad game but no one seems to care about that as long as there is money involved and you make a good game once a while *cough* Gearbox *cough*