Why do big game companies make triple A games for hundreds of millions of dollars? It seems to me that the model for this was the movie industry. When I was young, cinemas still showed a mix of large blockbuster movies and smaller production, even B movies. But the economies of scale of movies made it so that the huge blockbuster movies were more profitable than the cheap movies. These days, indie movies are something only a few specialized cinemas in large cities might still show. The general movie market only has films that cost hundred of millions of dollars, and these crushed the smaller competition.

Games have very different economies of scale, especially when distributed digitally. The moment a game arrives on the Steam platform, there is nothing to prevent it from being sold millions of times at no additional cost to the developer. But there is also nothing to prevent it from being a total flop and selling just a few thousand copies. It then becomes a consideration of risk vs. reward: The two Japanese developers only risked two months of work, and if their game hadn't sold much, it would not have been a big loss for them, and maybe a fun experience. They got lucky and made millions, and after the share that Steam takes, they only need to split the money between the two of them. In comparison, 6,000 people are working on GTA 6. Now GTA 6 is extremely unlikely to flop, and will probably also sell millions. But its budget is over $1 billion, and it can't possibly reach the same return on investment as Meccha Chameleon. It can get its production cost back, and make a nice profit for the game company and its shareholders. It can't sell ten times more or hundred times more than expected, because the expectation is already selling 40 million copies, and that is approaching market saturation.

Of course any videogame of any size and budget can be a failure. The trouble with triple A games is that they aren't guaranteed to make their development money back, even if they just sell an average number of copies. That is especially bad for live service games, which are expected to not only sell well, but produce much additional revenue over the further lifetime of the game. The larger the company and the bigger the budget, the more people lose their jobs when the game just gets a lukewarm reception. Smaller studios and indie developers can more easily recover after a failure. The difference between the games industry and the movie industry is that there doesn't seem to be much correlation between the budget of a game and the probability of it being a commercial success. You can spend a hundred million dollars on making a game and sell less well than Meccha Chameleon. That is a pretty bad business proposition.