There are three types of game studios IMO. Studios like Blizzard and id and Valve which make really innovative games and thus have huge dedicated followings (Starcraft, Half Life, Doom/Quake), but once in a little while. Studios like EA and Ubisoft that release a multitude of mediocre and good games and innovate constantly. And lastly, studios like Midway that make mediocre games, once in a while, and struggle to make any serious gaming innovations.
The third type either gets bought up (Westwood Studios as an example), break up (Infinity Ward, makers of Call of Duty, were originally part of 2015 Studios) or file for bankruptcy (Midway and a plethora of others).
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