A) not all movies break even, most lose money, so the "hits" are needed to keep the lights on. It's not unlike VC investing.
Ironically small movies tend to lose money because they're small, telling small stories, with small ambitions. Ultimately these don't attract much of a cinema audience, and even those who enjoy them won't necessarily encourage others because (B). Streaming is a new, and perfect market for these with a very wide global audience - but making it for streaming takes out all the upside, even further constraining the budget.
There is no "community" (aka audience) already in place for some random new action movie. It costs a fortune to make, and returns are highly variable.
Contrast this with star-*, marvel, James bond, Tolkien etc. There's a pre-established market for these. If your gonna spend North of 100 million (or a billion for LOTR) there better be some expectation there.
Which brings us to (B). B) - why go watch it in a cinema? Growing up my TV was tiny, sound was rubbish, quality was bad. And cinema was cheap. It really was "better on the big screen". Now my TV is huge, sound is amazing, I can pause to go yo the loo. And a month on streaming costs less than a single movie ticket.
Sure there are still movies made for the big screen - Top Gun Maverick is grand in scope and beautifully filmed, and imax worthy. And Tom worked hard for 3 years convincing people to go see it (spoiler: worth the wait.) it's a sequel, barely, not a franchise - but we very much know the movie we are going to see.
The point being that that is the first time I've been to a cinema in 3 years. Before that I've seen maybe one a year, much less an average. I figure 99% of the movies I watch now are at home.
To those complaining about all movies being Marvel, well clearly they aren't. But if you want variety in movies then the cinema is not the place to look. The variety is now on streaming where small movies with modest budgets can better reach a wider shallower audience.