Supply is literally infinite thanks to digital distribution

Hate to break it to you, but disc space, servers, paying people to ensure servers don't go down isn't really cheap. Sure, it means they can effectively sell copies infinitely, and that the costs of distribution are much lower than they were when you had to have a physical product, but that does not make the cost of distribution zero. Valve spends a metric fuckton of money and effort making their service super resilient to downtime and resilient to hackers.

Back in the day, games were $80-$100 USD

DOOM was shareware. Pretty sure it was $30. DOOM was the most widely installed software on the planet. Their small team and lack of real advertising budget is referenced by Gabe Newell as one of the things that got him thinking about digital distribution to begin with.

Newell said: "[id] ... didn't even distribute through retail, it distributed through bulletin boards and other pre-internet mechanisms. To me, that was a lightning bolt. Microsoft was hiring 500-people sales teams and this entire company was 12 people, yet it had created the most widely distributed software in the world. There was a sea change coming."

Marketing costs are overinflated. There is no reason so much money should be spent on marketing a game.

I mean, we're not living in 1993 and DOOM isn't the only game. Every day, hundreds of new games are released. How will you get yours noticed by anyone?

DOOM didn't have that kind of competition. Indie titles of the modern era do.

Compare that with today, where game engines are plentiful and very user-friendly, and other tools come with many automated or assisted features that would previously had to have been done by hand.

And game engines that you don't have to build yourself can cost quite a large amount of money to license the use of.

Games didn’t used to be as big, but you know what?

Elder Scrolls II: Daggerfall would like to have a chat.