Not always. Development can be funded by credit/loans. A lot of business is, particularly in sectors like the construction industry.
Sales forecasting is definitely a major part of any development of a product. You think they make stuff at random and hope it will sell? They look at the sales performance of other items and the perceived demand and do an assessment comparing the item to the projected likely sales to the development cost to decide if the item is developed. If the sales forecasts don't show a good chance of acceptable profit vs risk they won't develop the item. Yoshi P literally said this is the model SE uses for developing Mogstation items and it is the reason the Krile outfit hasn't been developed yet. The technical costs of the development for sale of the Krile outfit are high enough that there is a question of it would be profitable. It would have to sell well to be worth it.
Accounting is about balancing books. Revenue is balanced against expense. If the Revenue earned by a sales item exceeds the expense of its development, it is effectively paying for itself.
MMOs are by far among the most cost intensive entertainment software items to develop. Take a look at Blizzard's earning reports. Yeah WoW makes them a lot of money but it is hugely successful, on a scale much bigger than FF14, and Blizzard's other franchises like Hearthstone and Overwatch are highly competitive. WoW has been in decline but blizzard's earnings are up.
That is because the MMO market is quite a small portion of the gaming market and MMOs are expensive to make and maintain. Hearthstone comparatively was made with a tiny development team (like 20 people) and is now one of Blizzard's big earners. Small investment, huge earnings. The Mobile market in particular is huge. MMOs have been in decline for a while. There aren't many major western companies developing new ones in the current market. That is because the profitability verses cost investment of MMOs has been in the decline in the recent past.
SE has a lot of games it develops for a number of markets. Last Financial quarter SE reported its yearly revenue was around 2 billion dollars (Note this is revenue, not profit). Even with 1 million subs FF14 would be a $180 million of that, less than 10%.



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