[vinkelhake]

That kind of reasoning makes sense if you have a single publisher controlling the entire market and they don't want to undercut their own business. But that's obviously not the case. There are plenty of publishers that want to publish games like Terraria, especially if they go on to sell more than 60 million copies.

[calibas]

I think the market is actually much more segmented than your comment implies. There's publishers who absolutely dominate certain niches, especially sporting games, and the only realistic competition they have are themselves.

[LightHugger]

It's worth keeping in mind that the "market" for a particular player can actually be incredibly small depending on their interests. In the most extreme example, a player might be a fan specifically of a single IP or series of games. Call of duty is one good example because there really are a lot of people who are like this. Video game IPs are a government granted monopoly on a small scale, and the word monopoly is not there for no reason, there is only one place to get CoD if you are a fan of CoD. Predictably, these companies follow the OA's suggested strategy very closely!