I reckon you could half the teamsize of every game company, split them into other companies, give the workers complete control over whatever they make and every single one of their games would be better for it.
The audiences would be smaller because the games they make would aim to be really really really good at one specific niche thing. But they'd be better games at what they try to be.
The curse of AAA gaming is the goal of trying to appeal to literally everyone simultaneously instead of specialising in a niche and serving that niche audience in highly advanced ways.
You'd get more games and they'd be better.