Maybe not, but the most profitable companies grow the most and thus have the biggest market share and the most visibility through marketing and thus become even more profitable etc. Eventually all commercial entities either fail, are absorbed into a conglomerate, or remain obscure and have very limited impact.
Not necessarily. There are numerous small cafes and restaurants in smaller towns, for example, that are surviving just fine, and getting enough profit to satisfy owners. They are not expanding, yes, but they usually have a very
strong bond with their customers.
Same way, there are certain indie game devs, that may be rather small, but treat their audience well, and thus, have great relationship with them. Frictional games (SOMA, Amnesia), Taleworlds (Mount and Blade) come to mind. And larger companies - CD Project Red. Rockstar games, From software. Which brings me to next point...
There is no incentive for private companies to apply any moral thought to their decisions, except PR and personal morals of the decision makers.
The companies I mentioned above. What do they have in common? They are respected by their audience. Some even claim these companies never made a bad game. Why? Because they actually make good products, that are consumer-friendly.
And that's the point. While a company does not
have to apply morals to their decisions, doing so will improve their relationship with their customers. And that is vital for video game companies. Because people will trust them. People will advertise these companies themselves. And people will be more forgiving, giving these companies more freedom and room to tweak their projects, while still retaining a devoted fanbase. And this may very well keep the company going well, in the long run, even when the bigger and greedier ones go down.
As game companies gain controversy over mistreatment of their customers, ever-increasing number of those customers stop buying/using their products, refund, or straight boycott them. And in these times, you can bet those people are not staying silent. At the same time, companies with good reputation attract customers.
Private companies are, however. That's how the system works.
It's not that this is how the system works. It's that this is how some companies choose to operate. Never settling down, always trying to get all the money, instead of being fine with what they have and maybe focusing on something else... Such as actually satisfying their customers.