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Too mant choices", read: "Supply/Demand is imbalanced".
What it comes down to, there are a relatively finite amount of dollars available from consumers. As in any market, once you hit a particular saturation point, you are not increasing sales - only increasing competition for the existing sales. We have an "industry" run by media giants who will pump out 100 titles in a given genre, all basically the same, all with fundamental and deeply grievous flaws. Yet, they could produce 10 titles that were all finely polished, and all excellent games that will be talked about for years - and make the same total number of sales.
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Good point in fact I would go so far as to say one good game will make far more long term than 15 mediocre ones.
It will hold its price longer & still be available in the bargain basement department years after release, its had a positive effect.
The mediocre game on the other hand may not cover its cost & has a negative effect causing people to buy less games because they are rubbish.
To this end there are now 2 software houses I will never buy a game from again because they are incapable of marketing a finnished product.
If they want to have multiple income streams why not do one big game & revisit old games that can be done cheaply & knocked out as such after all there is very little that is actualy not a ripoff of a previous game format.
Things like Cannon Fodder or Speedball great or amusing little time wasters that fitted on a floppy disk!!! Nowadays most people cant finnish the game properly before release let alone take time to optimise the code so it fits on a CD, no need we will release it on DVD.
Perhaps they try to market the games so they are good enough that you will still buy them (just) but not worth playing a second time hoping you will buy another one