Investment Theory: In the 80s and 90s, there was a sea change in the way invested money did its its investments. No longer did people look long-term. Short-term investments, fast profits. This change was widespread, and actually came to computer games late since computer games were still largely small, self-financed businesses in those days. But as the push for graphics skyrocketed development prices beyond individual means and computer game companies began consolidating, investment money began entering the picture, along with their market theories.
Annualization: Investment Money changed a lot of things, but the big elephant in the room is annualization. Under annualization, every game IP needs to produce 1 game per year. Thus, one COD per year, one Madden per year etc. Why? Because of investment money. Because investors in, say, a small RPG company are largely there as lovers of RPGs. Investors in a large computer game conglomerate, on the other hand, on there for profit. So, even if the suits in the company like particular genres, they still have to keep the investors happy. And here's where the elephant in the room comes in. Large and complex games, like RPGs, or games that demand a high level of detail per screen, like adventure games, these kinds of games demand long development times. 2.5 years for RPGs. So, the publisher has to go to the investors not once, but two or three times, and explain why this one division is showing a 5 million dollar yearly loss of their money. You're hurting their investment portfolio. They demand to know why you're messing with their money, throwing money down this large hole. Now, a game like COD is easy to reassure investors with, because the rate of return is so high and the profit margin as close to guaranteed as it could get. RPGs lack such protection, because:
Lack of Market Potential: As wonderful for RPGs and other ignored segments as Kickstarter is, it doesn't actually show anything publishers didn't already know. They're not stupid. They know very well how many traditional RPG buyers are out there - budget tier game development numbers. Keep in mind, anything under 5 million is a budget title. The kind of knock-off game located in a separate bin that nobody wants to associate with. Kickstarter produces a lot of money in the public's mind, but it's chicken feed in terms of actual game development budgets. The picture that most people get in their heads of the kind of RPG they want, that picture is a mid-size development game, or 10-20 million. So, to make a budget title, you picture your ideal game, and you start ripping pieces out until you cut down enough to be 2.5 millions dollars. The issue here is, the market for traditional RPGs stalled out. The number of sales for Diablo clones grew steadily, the number of sales for Bro-shooters grew astronomically, while the numbers for RPGs inched up slowly. That, while people demanded ever more complex graphics from every genre. In such an environment, high-risk, low-reward genres like RPGs get sidelined for something with a forseeable growth future. Because remember, this is investment money that is looking for a good return on their investment. A low-growth market that has increasing costs is kind of loser investment.
Consoles: The console shift happened when it did not just because of Xbox. It began with the Playstation. The Playstation made it "okay" for 20-somethings to use consoles. Not only was that a huge market who had lots of disposable income from groups of people who grew up with consoles, the Playstation shifted the demographics. Huge numbers of people bought Playstations, causing a massive install base of people who are there for only one thing - unlike PCs - to play Playstation games.It's a fixed market with assured numbers, which investment money loves. They know exactly how many Playstation games they could potentially sell, since the final number is equal to exactly one for every Playstation sold, and that number is big. Once the road was paved by Playstation, Xbox is the logical end. Xbox is just a Western company using Western methods and production to reach the people Sony was doing with Playstation. Thus, Xbox is the most visible symptom of a much larger disease, and it happened when it did because that's when the Nintentdo generation grew up mixed with cheaper products and graphics becoming advanced enough to attract a broader audience.
3d: 3d graphics were once heralded as the cheap way to do things. It was going to save everyone money. But costs quickly spiraled way out of control as people demanded higher and higher quality, thus quickly stripping 3d of its advantages. Many quality companies didn't survive the technical demands of shifting to 3d, and the quick spiral of costs put more marginal game companies out of business, forcing them to sell to large conglomerates. Conglomerates which use investment money.