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Video Game industrie is like the movie industry. There is more than 3000 game out every year, 100 don't lose money, and 10 of them pay for the 3000 others.

So yes a AAA make a lot of money. but this one is paying for all the others.

And games are not really expensive today. If you remember, an Atari Jaguar Game was around 150$ at the time, and a neo geo CD was more like 250/300$ and pretty sure an snes game was also around the 150.