I'm not sure size itself is necessarily the problem, since all these companies have always been relatively huge, so much as that when a large company makes a strong shift in their approach and focus, it not only takes forever to get everyone aligned, but even longer to recover when they fuck up. IF they can.
Square-Enix could've easily used the start of this gen to rebound in a big way, but instead, gave us a FF game that is arguably the worst in the series, two sequels that nobody asked for, and a general feeling that if they did properly revive series like Parasite Eve, they'd screw them up so badly that we'd rather they just not even try.
Same deal with SNK. They needed to launch with something on the level of XIII, but floundered for years with a slew of aimless ports, bad netcode, the debacle of XII, a 3D Samurai Shodown, and a bunch of pachislot crap that's probably the only thing keeping their lights on.
I could rant for awhile, but it boils down to management and marketing strategies drummed up by jerkoffs with business and finance degrees who think they know how to make games better than the people they've hired to actually make the damn things. That's always been a factor, but the sad part is how obvious it is in the games themselves over the past few years.
I mean, someone at Capcom seriously thought staffing 600 PEOPLE on Resident Evil 6 was a solid plan.
