So Forbes has an article on why games cost so much breaking down where your $60 goes when you buy a game. (Be sure to click on the graph at the bottom of the article). But there’s a lot of stuff off with this analysis.
To start with, you don’t take 20% on every box sold for the programming cost. Once you have made the game, the costs are known and fixed; you recoup, and then this chunk turns into publisher and developer profit (mostly publisher). Same goes for the art costs and so on. In fact, in general, this graph tends to mix the categories of costs in this way.
It also ignores the fact that this isn’t really how the business works. There’s a portfolio of titles; not all will have the same mix. You rely on tentpole titles to carry the losers — which are most games made, really. And major tentpole titles often have far higher programming and art costs.
It’s also curious that this doesn’t actually give the story as regards how developers get paid…