[sshumaker]

Adding to this - for much of the pre-digital distribution era, piracy+retailers+rentals sucked out nearly 80% of the profits of the ecosystem. It made it impossible to break even as a studio unless you had a top 20 title released that year. The economics always sucked there - publishers fund development against royalties, break even happened after recouping this advance plus whatever costs the publisher larded on, per-unit royalties were often as little as a few bucks per game sold, and the publisher owned the IP. As a studio you had to get a continuous string of big hits as a single flop might put you out of business.