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I've worked in games for over 25 years. This sort of arrangement is very common. Note there are bad developers and publishers so both get screwed at times.

Relationship building in games is very hard, there is a lot of distrust. Milestones can be very hard to pin down as a task being complete is very subjective (when are player controls done? when implemented or when they feel good? what does feel good mean?). You can meet every milestone and deliver a game that isn't fun, you can miss every milestone and deliver a best selling game.

At it's core the industry is trying to use the Hollywood movie model for financing, designing and developing games. It's not working, they are far less linear, far more interactive and significantly less well known as an art form.

There are no (or few) unique problems in videogames but they do tend to be in the extreme compared to the other arts and engineering problems.

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