"Why not?"

I don't know, but I can't think of any developer studio that succeeded that way.
You think maybe it's because people don't really try, but i doubt it.

"With the same (wrong) argument, you could state that free software will never penetrate the server market. Wait..."

You're comparing apples with bananas here ;)
The os that got so popular for running on servers was developed over decades and is a collective effort of countless volunteers. It's also based on the lucky fact that somebody like rms developed the GNU system and released it under a free software license. He wrote a free operating system that was able to compete with other ones available at that time.

If a second rms would come along and write a free game engine that is as powerful as modern game engines and make it as easy to make a great game based on it just as it is to make a great distribution based on GNU, then i would not doubt that free software would soon penetrate the game market.
But that's very unlikely to happen.

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