To expand on this a little more, game development has an extremely long tail - perhaps <1% of games are Angry Birds or Minecraft, 2-3% may do decently, ~96% never make cost.
You're including all the zero-effort garbage that floods the app store in your speculative figures. And even those might break even because the budget was probably $12.
Look at the "real" indie games market (for the sake of argument, exclude anything not sold on Steam or GOG), and things look much more favorable.
Exactly. Every time I see a discussion about this someone brings up "There are 10,000 new games a month. Making money is pure luck."
When you remove all the student games, the angry birds clones, the board-game clones, and the just plain terrible games, you're left with a much smaller pool of competitors.
Being an indie developer is like being an actor. Everyone thinks that it's all about luck, but they forget that 99 out of a 100 people who move to California to make it in Hollywood, can't act their way out of a paper bag.
If you move to LA, and you have actual acting talent and the looks to match, chances are you can make money--maybe you won't be a huge star, but you've got a good chance at earning a living.
