But the costs of physical product distribution are very high. You have to print the pages. You have to package the final product (binding, in most cases, but also box sets occasionally). You have to store the product. You have to ship the product. You have to maintain stock of the product.
The costs of digital distribution are very low. All you have to do is create the product and set up a secure digital shopfront (or subscription service).
While all of that is true, all you have to do as the publisher to make it worth your while is make sure the physical product has the proper- easily calculated- markup to ensure you cover your costs and make some kind of profit.
By not producing books, they are not capturing as much of the market as they could be.