A good publishing house needs to compete in the market for both authors and customers. One of the main takeaways I had from attending the London Book Fair in 2019 was that even industry veterans have no idea how well a book is going to do. It is difficult to predict what the next great novel will be. Even big hits that provide an influx of sales can later fall off the radar. Some books start off slow and then suddenly take off a few years later.
In traditional publishing, an author writes a book and then sells the manuscript to a publishing house that takes care of the editing, marketing and other promotional activities. In self-publishing, the author has to manage the dual tasks of creating the work as well as polishing it and promoting it to an audience. There are pros and cons to each decision.