I think the other ones are giving up because the market isn't really saturated, but these companies have some big competition. I think in the gaming industry you have zero chances of success if you don't come into it with the same level of tech as what is already out.
I think that because if you can't produce something as good as current system, people won't waste time on your product. Just think about it, would you buy a system from a company that plays like the PS2? I wouldn't, that means they need to have some money invested into their company, and come with a bang, but generally small companies can't do that.
The game industry was one of those industries where you have no chances of success unless you were there in the beginning as you built up reputation. I'm not saying it's impossible, but it's going to take some work.