
In the case of Demon's Souls, Atlus saw an opportunity for the game after Sony passed on selling it in the US. Once that game became a success, there was no way a small publisher like Atlus could have hoped to outbid a megapublisher like Namco.
Atlus did a lot of publishing work on the HD consoles for other small publishers, stuff like Spectral Force 3, Operation Darkness, and the Game of Thrones video game. Their in-house work, however, was devoted to handhelds, but I think Atlus has made a solid reputation for itself this generation. It was an almost completely unknown publisher until the final years of the PS2. Hopefully Catherine's relative success will encourage them to develop more on the PS4.