Why do games cost so much to make?

This was an FAQ I got from a lot of people, most recently from Youtuber Rebellion3112. My most recent attempt to explain it got so long that I thought it might just be better to post it here so that everyone can enjoy (and so in the future I can redirect people here and lazily continue lazing about).

Everyone thank Rebellion for sharing. (Thanks, Rebellion).

So let’s get started. It is REALLY hard to explain this without going into a ton of detail, but here’s how it works in the simplest possible explanation (and this is still really long):

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