Coders and artists work for a living wage for years without any profit whatsoever because the studio expects their game to obtain some kind of success.
No, not in the industry they don't. They get pay checks. The more successful the company, the more skill, the better the pay. But they're working for their hourly just like everyone else, and they get paid before the game comes out, not after. The LEAD developer, owner, that's a different story. Their monies are based on success, by way of their contractual agreement with the publisher.
That's why professional developers, once they're established, return to an indie form of development, because they don't need to make an hourly just to pay the bills. They can strike out for that chance at pure gold, or go broke paying their people on a game that may not sell.
What I wonder is if a major studio couldn't have the best of both worlds - a steady stream of income as the game is developed, with increased fan devotion to an IP and much more interest in expansions when the final goal is reached.
Maybe. But bigger companies and publishers aren't satisfied with a few hundred thousand sales at $10, and paying year by year to maybe sell 5% more units than they did last year. The whole industry is currently built on the "big sell". Smashing records. $60 a unit. Make your money and run. Until the people that foot the bills for these things are willing to accept a lower/different revenue stream, things are going to stay the same and they're not going to invest in a 5 year project. MMOs only get made because they can bill straight to people's credit cards and project their revenue. You can't make profit forecasts on the indie model, you really can't. No one could have predicted Minecraft would do so well, not even Notch.
And let's not forget. Fan expectations are directly proportional to how much they pay for a product. Your chances of surviving selling a $60 game in beta and slowly trying to reel in more people as it develops are pretty slim, in my mind. When you're throwing around AAA budgets, first impressions are the only ones you get.