Unless you're an independent developer or part of a very nice development/publisher company, you're most likely not getting a cent of the profits from sales. Most developers who work at "mainstream" companies like EA only get a regular paycheck. Maybe, maybe some of the "big" names get a cut or a % share of sales.
The people who get the profit from the sales are the executives, the board, the companies themselves, etc.
If a game gets really, really popular, they might keep the development team on for another game, so I guess you could argue that you are helping the people who made the game, but since that is an unknown variable (There might be copyright issues involved, they might have already contracted another team of people, sold the IP, only rented the IP for a period of time, and so forth.) it shouldn't be a factor.
I suppose there might be an increased chance that the makers get to make more games if it's successful, but the definition of "success" is up to the publisher, so, like I said, it shouldn't be a factor. You can't buy a game made by these companies and think that you are helping the developers.
I don't know how many independent developers are in a situation where they can get profits from sales/royalties, but when even Kickstarter projects seem to have obligations to publishers, I'd assume that there aren't as many as I'd imagine.
Piracy, renting games and buying used games is not harming the game development industry as much as the industry is hurting itself. Not even remotely close. If I were to put it in %, I'd say piracy, renting game used games (With all the indirect effects such as people learning about new IP's, developers, genres, etc.) is hurting the industry by 5%, while the industry is hurting itself 90%.
They are the ones who are making games with ridiculous budgets when games have proven that it's not really necessary -- you can make games with a reasonable budget and earn money.
Studios hire so many developers, and keeps hiring so many developers, while constantly kicking people out whenever something is done -- they kick out people who have learned to work together, people with experience -- only to hire a new batch of people who needs to learn how to work together. This leads to an extremely inefficient workflow.
Say a publisher house hires 50 people to make a game. It becomes a hit, they fire the people, and hire 50 people again to make a followup. Or they fire 25 people, and hire 25 new people. This probably leads to a lot of tension (It's a creative process.).
It's expected to be bigger, of course, and the new people have to work within an even stricter set of rules and guidelines on the gameworld/design established by the previous team/people/game, not to mention the workflow established by the previous crew, in addition to the standard rules/guidelines by the company. They also need to learn how to work together, on a bigger project, so, when the going gets tough, the publisher hires more people. They are now 100.
And this cycle keeps going, probably even across different development teams and games. After just a few games, they have massively inefficient teams, which results in a massive budget and little work to show for it.
Then you have to account for all the people who leave, which is probably a lot since game development is still a somewhat creative process, and involves a lot of decision making. This is probably greatly amplified by the fact that the bigger companies hire new people all the time.
Other significant variables: what is popular in gaming, what investors might consider to be popular. Mainstream and semi-mainstream gaming development might be inefficient nowadays, but it's still expensive at a base level -- it seems like it's necessary to get funding from, most likely, people from other industries, and grant them a lot of control, so I'm not sure if it's possible to avoid the inefficient workflow unless you're really careful with who you "get" funding from.
(My assumptions about the subject based on what developers have said; my overall impressions.)
When you consider how Valve has been doing, it's pretty evident that the regular publisher model is completely wrong. Even before Steam, they were seemingly doing very well. People do not seem to leave all the time either. I mean, they were considering doing a console, and researching some unique tech, so they are probably filthy rich.
