> I think if big game studios, rather than dumping their copious amounts of money into single, giant-scope games, dealt it out amongst a variety of smaller teams for smaller-scoped projects, they'd be way better off.

This is what game publishers do, and many of them are struggling too. It’s harder than it seems to pick winning horses. (Though in this case, it may be partially because more and more skilled teams are opting to self-publish.)