In a nutshell, there's two reasons:
1) Very few games or apps make any money.
Very few. The most generous estimate I've heard of is around 1%. If a company has 5% of their games break even, they're doing 5 times better than the average (and still has to figure out how they're going to recoup the cost on the 95% of projects that failed). If you work on a game, there is a single digit percentage that the project will survive and you'll continue to work on it. This is why people are willing to to get crunched by AAA companies, because there's a slightly larger chance that they will actually be a company to work for in the near future. Video game companies drop like flies and for every Cuphead there's hundreds of bankruptcies followed by layoffs. They just don't make the news like the Blizzard layoffs did.
2) Corporations have to compete for capital. It takes money to make money and without someone to invest in your company you're going to be dead in the water. Why would anybody invest in a company that has a single digit percentage of their projects make any money? Because there's a chance that they will churn out a Fortnite. The game industry is high risk and high (but unlikely) reward.
Now if there's company A that gives you a return of x% and a company B that will give you a return of (x+10)%, why would anybody invest in company A? Spoilers: they won't. If your company isn't providing the highest possible returns, investors will put their money in someone who will. There are investors (like people who are just trying to save up for retirement) who invest in non gaming companies that give smaller returns but those companies can provide stable returns which the game industry just cannot provide. The moment the company is not expected to increase equity for its investors, the investors will find someone else who will.
When you see "Company had huge revenues!" headlines, realize that doesn't mean much if you're an investor. Investors want to see a increase in equity and large revenues do not necessarily mean in increase in equity. Activision had more cash/investments at the end of 2014 than 2017 but their stock price was higher in 2017.
Activision, EA, Epic, and other such companies are anomalies in the gaming industry. For every AAA company that's raking it in that are hundreds hanging on by a thread.
