This would be about 2008-ish - EA invested heavily in new franchises, or different takes on existing ones. Dead Space, Mirror's Edge, Battlefield: Bad Company (a huge departure from the Battlefield norm), etc.
None of which sold particularly well, and pretty much Dead Space is the only one that lived on as a franchise. The market voted with their wallets for more sequelitis.
Mirror's Edge sold more than two million copies according to an EA court document released October 2010.
BF:BC has sold over 2.5 million copies according to VGChartz.
BF:BC2 has sold nearly four million copies. Oh, and it's a sequel to BF:BC, so that franchise lives on.
And these are games that the free market rejected?
They do: they find other games that are more profitable to make.
> a game that sells 2.5 million copies is still a game that the market has validated.
Corporations don't exist to be "validated" in some nebulous. They have to make money. I could get the market to wildly validate any product: give it away for free, or, hell, pay people to use it.
That unfortunately doesn't make for a successful business.
If someone else can produce a title that satisfies the demonstrated market demand for city-simulation games by producing one that is profitable, then they'll win and EA will lose.
The AAA arms race has destroyed many studios, IPs and careers. 10 years ago, it used to be that one single hit could pay off your other 9 underperforming titles. With budgets going up 10x and top sales going up at best 2x, that balance can't hold and you have to be ruthless killing underperformers. I'm not a fan of Bobby Kotick (I was part of one of his layoffs!), but look at how he has led Activision as a company.