I don't think that's accurate at all. Most games, and startups, are just bad ideas that can't pay for employees and stuff. The problem isn't living expenses, that's just one number you need to reach.
Developers who can't make money can't afford to make games as their occupation.
It's not living expenses alone; I have worked for a company that does a significant amount of offshore hiring. The going rate for a competent developer in India is less than $20,000 per year. In India, $20k a year buys you a comfortable life. The equivalent salary in the US is probably $100k. The numbers in China are similar (though Chinese developers are harder to work with because their English tends to not be as good).
Given this context, some of these "game dev fail" stories about making $20k from a year's worth of work suddenly turn into success stories. So imagine if you went and hired a hundred developers and started cranking out 10 games a month. Some would succeed, most would fail, but the failures can just be reskinned and sold again.
Developers who can't make money can't afford to make games as their occupation.