Just like in the Music industry were the artist does not even own the rights to the song he or she sings in game development the publisher usually buys the intellectual property that the developer made as part of the publishing agreement.
Enter bullshit mode, where your favourite franchise is butchered, taken to hell and back with every sequel, spin off, trilogy, prequel, hexology (in that order) before you know it you’re not even sure what the first game was all about.
Ubisoft for instance published Far Cry, a game developed by CryTek and retained the copyright. The original Far Cry was a great game, then along came the Xbox version which wasn’t too bad, then the Xbox sequel and Xbox 360 version, ok, now the Wii version and still a PSP version in development.
Clearly this is bad for the poor old fans but relatively good for business as publishers suck IP’s dry. Bigger development houses can afford to keep their IP’s and press hard on publishers to publish the game without buying out the IP’s. Other developers such as Nintendo are really very nice, even letting second party publishers (such as RARE) keep their created IP’s such as Perfect Dark and Banjo Kazooie.
The benefit of letting developers keep their IP’s is one of creativity, they can instead of exploiting it for more and more profits through spin offs and the like develop them further in a positive manner, take Insomniac with Ratchet and Clank as an example.
As developers get bigger it gets harder for publishers to buyout the IP’s of their products, developers can be far more independent, they can fund their game beginning to end and tell the publisher ‘here it is, were 80% done, you want to publish it or not?’. Of course if the game is good the publisher will want to have its name tacked on even if they don’t get the IP rights (such as EA with Pandemic on Mercenaries 2).