I took a look at some of their investor reports while trying to explain this earlier but couldn’t make heads or tails of what was additive and what was descriptive.

But at a high level: It is very believable

Let’s take a step back for a moment and look at nVidia. It is a VERY common statement (I think even Jensen has said it?) that nVidia is not a hardware company: They are a software company. They spend a LOT of money on Solution Architects/Engineers which are basically people that you buy the time of when you make a large order. They work with you to make your code more performant on nVidia hardware and are why so many games (and everything else) blazes on nVidia but struggles on AMD (less so these days) and Intel (ha!).

I believe Epic does the same with the Unreal Engine

And, presumably, Unity does the same for Unity.

And those people are pretty well paid and only have so many cycles per day. That drastically increases your Sales/Marketing department cost but is pretty much a necessity to function in a market dominated by… the companies who have been doing that for decades.

And then you just have product development. A LOT of money is thrown in to trying to make the next Nanite or whatever in an attempt to distinguish your engine and get market share when the next wave of games release… two or three years later. Which is the other issue. Every expenditure is about making profit 1-16 quarters later.

Another aspect people don’t really understand: The major middleware/hardware companies always have their eyes out for new tech. And it is not at all uncommon to give a professor (or even a grad student) a giant sack of cash to work for the company for a year or two to implement feature X. Which is in addition to the army of Software Engineers who make feature X stable and performant.