Something else to chew on is the fact that Nutaku needs to raise up separate dev teams for their games whereas DMM doesn't. This makes me wonder if their system can actually scale well since revenue would need to be insane to hire dedicated dev teams for each game (and that's really the only way I can see games being maintained to the level of their DMM counterparts).

But I think you're underestimating the size of the market. They aren't likely to be in danger of shutting down the service as a whole.