It appears that a significant portion of people actually do buy their products for the character creation/studio functionality.
And they make enough off of them to fund their next title(s) and stay afloat. Sure, they don't rack EA-level profits but they are doing fine.
Example.
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is DMM's 2019 Yearly Top Seller list (just one of the storefronts their games are available).
You have:
- AI Girl at #1
- Koikatsu Trilogy at #2
- PlayHome at #8
- HoneySelect at #9
- Koikatsu at #11
So they have 4 of top 10 games that sold the most throughout 2019 -including the top 2 spots- (and one more just shy of entering the list), and 2 of them were made in 2016 and 2017 respectively, but they apparently keep selling like hot buns.
I'd guess they're doing just fine.
That is pretty close to how they operate. It's an entry job for many people in the industry and after a short stint they move on and get replaced with new entry-level employees.