Maybe we're the minority. Still, wube (factorio developers) seem to be living comfortably, they don't seem to be hurting for cash. There is enough money in niche communities if your product is good

Getting there is more challenging than it used to be. Plenty of non-AAA hits seem to come with tales of development almost breaking them, or running out of Kickstarter funds. Including two of my favourites: Pillars of Eternity and Divinity Original Sin.

I'm sure there's plenty that didn't make it too.

Survivor bias. How many great indie games never got the exposure and died on steam making basically nothing. The fact that some people can do alright is not evidence of a healthy market.

People who enjoyed video games used to be a weird minority as well. If a niche is sane it can grow to become the majority way of doing things.