The problem is that there isn’t that much to do for these armies of people during the early stages, when it’s mostly a handful of programmers and designers fleshing out the core concept. Then, during the late stages, you need tons of QA people, grunt workers to create tons of art and fiddly little bits of implementation, localization and bug fixing, and whatever else. But, if you haven’t planned ahead so that there is another game perfectly in the pipeline to transition all the grunt-workers over to when the first one ships, they’ll all literally just be standing around doing nothing until the next game gets in shape that it’s ready for them, and usually the solution is to fire all the people who just made millions of dollars for you pouring their heart into something. It’s upsetting.

There are many things that game companies do consistently very very wrong, but this is one thing that isn’t completely “their fault.” It is possible to moderate the impacts but it’s very hard and it doesn’t really completely go away even if you work hard at it (which most of them don’t care enough to even try to.)