[Gregstrom]

There are way more games than anyone can play, which to me says that you don't need to sell a game to a very large percentage of consumers to make a profit.

I believe a mainstream game (multiformat release) is a decent commercial success if it sells a million copies, which isn't exactly much on a global scale. After all, there are perhaps 20 million PS3s (hopefully a conservative estimate) in consumer hands - if we assume that the other two console formats have similar global sales that's 60m consoles. Heaven knows how many game-capable PCs there are. But... it seems you can get a big success if not even 1 in 50 potential customers buys your game.

For a small dev team and a single-format game, I'd guess you don't need very many sales to break even, and thus I think there's a lack of competitive pressure.