it's not like game studios have increased in size, it's just more bloat. look at old games' credits, you'll find maybe even
bigger studios (making art and programming with limited hardware was much more time-consuming....) but they had good gameplay on a much smaller budget. Today, studios waste money on analytics, governance things and other fluff...
Best case study is Mojang, the company has over 800 employees but it is literally outperformed in game design and update quality/quantity by ten people at Re-Logic. (which includes managers and legal as well!)