Ironic for a company that published indie hits like Terraria and fresh mainstream games like A Tale of 2 Sons.
This does not reflect the whole gaming market but rather the failure of publishers to innovate well and make new things people like. Big publishers are risk averse and it's a common path them as they get bigger, and care more about shareholder value or venture capital. They won't take risks, and can't accept failures so they retrench. It's not a recipe for success as that end of the games market is already dominated by big publishers churning out annual versions of their mass market games.
A publisher like 505 r ally only has two possible futures on this road - go bankrupt as they can't compete or get bought out by a big fish who want their IP.
It doesn't say much abou the games market as it's actually very large, vibrant and varied. A publisher like 505 is not on the vanguard of the games market and like most people I had to look them up to even see which games they had published. This is just yet another company being mismanaged into oblivion and well beyond its hey day.