Okay but how to pay the employees when the first game hasn’t released yet? Still need an investor especially if you are going to start a studio with people that relied on a salary to pay the bills and have a family and don’t live in a dorm or their parent’s basement anymore.

And the vast majority of investor want to see a return. Not many philanthropists out there who want to fund a game studio. And a loan from a bank is impossible if the studio doesn’t have revenue. A for-profit co-op is a better structure, since it allows investors getting a return.