Why do videogame companies refuse to tolerate failure?

I keep hearing about videogame companies closing studios after few failed projects. Like why? Are those executives really incapable of understanding that videogames like any art need practise to improve? It's just like painting where the first painting is so horrible and the next one is less horrible and the next one is okay until finally reaching the good one. It's really that simple. You need to nurture your studios. Make them experiment with things and make failures until they finally know what works and what doesn't work.

I feel like those executives have no idea what videogames are in the first place. If that's the case, then why do they even bother working in this industry? Have the types and branches of business got reduced to videogames only? It makes no sense to me. Just wanted to share my view.