According to Free Radical Design, the now-defunct developer of Timesplitters, almost every first person shooter released into the market loses money.
The studio's co-founder Steve Ellis explained his sentiments to Edge:
"Nobody really buys any FPSes unless they're called Call Of Duty. I guess Battlefield did okay, but aside from that pretty much every FPS loses money. I mean, [look at] Crysis 2: great game, but there's no way it came anywhere close to recouping its dev costs."
It's interesting that Elli refers to Crysis 2 in particular. The development costs for the sequel must have been extremely high if selling over three million units doesn't result in any profit. That said, the game was the first to utilize Crytek's groundbreaking CryENGINE 3.
Ellis also commented on why Timesplitters 4 didn't see the day of light:
"I spent the whole of 2008 going round talking to publishers trying to sign up Timesplitters 4. There just isn't the interest there in doing anything that tries to step away from the rules of the genre - no one wants to do something that's quirky and different, because it's too much of a risk. And a large part of that is the cost of doing it."
Free Radical were bought by Crytek due to financial problems to which the studio then became Crytek UK. As for Ellis, he recently started a new studio entitled Crash Lab, who is creating three iOS titles.