Since there doesn't seem much in terms of defenders for this, I'll throw my at into the ring.
Ahem...
They need to eat.
No seriously. £1.2 million pounds is not a lot of money for video game development [http://kotaku.com/how-much-does-it-cost-to-make-a-big-video-game-1501413649]. Staff cost money, money that is normally provided by investors or publishers. That staff needs to be paid enough to make their jobs worthwhile (be able to pay rent, buy some food, pay off their bills, etc.[footnote]and that's if they're single and have no kids...[/footnote]).
Equipment costs money, some of which can be mitigated by reusing prior equipment, but there's still the costs of upgrades and maintenance.
Work space costs money, especially if you have special needs such as extra power consumption.
And on and on until you're out of operating costs. You can cut as much as you want, but cost cutting can only do so much.
Ahem...
They need to eat.
No seriously. £1.2 million pounds is not a lot of money for video game development [http://kotaku.com/how-much-does-it-cost-to-make-a-big-video-game-1501413649]. Staff cost money, money that is normally provided by investors or publishers. That staff needs to be paid enough to make their jobs worthwhile (be able to pay rent, buy some food, pay off their bills, etc.[footnote]and that's if they're single and have no kids...[/footnote]).
Equipment costs money, some of which can be mitigated by reusing prior equipment, but there's still the costs of upgrades and maintenance.
Work space costs money, especially if you have special needs such as extra power consumption.
And on and on until you're out of operating costs. You can cut as much as you want, but cost cutting can only do so much.