The work-for-hire model for dev studios is very uncertain. After you finish a title, you need to line up another one ASAP, or otherwise you've got to have huge layoffs until you do find more work. One company I worked for was deliberately making pitches that quoting prices below what they knew it would actually cost, knowingly making a loss on the work, because they didn't want to lay off their staff -- they'd rather lose a little bit of money over a long period, rather than be sitting idle paying everyone's salary with no income.
They thought they were just weathering the storm, trying to stay afloat during a tough time in the industry, but you can see that if all the big developers were doing this, then the littler ones who can't afford to make a loss were just screwed!
There's been quite a big shift recently among smaller developers, with many more trying to work on "original IP" instead of licensed titles. The problem with this model is acquiring the funding to support development, which traditionally was provided by a publisher (just like the work-for-hire model). Seeing how Kickstarter has exploded in the past year though, I'm really hopeful that crowd-funding will allow these smaller devs to independently work on "new IP" without betting their survival on the whims of a publisher.
Sounds exactly like my industry.
http://www.hollywoodreporter.com/news/rhythm-hues-bankruptcy-could-affect-421775
http://carpetbagger.blogs.nytimes.com/2013/02/27/the-economics-of-visual-effects/
keep an eye on this blog
www.vfxsoldier.com
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