Genuinely curious: what is your process then for image compression? I’ll admit I know next to nothing about compression at the moment, except that it comes in lossy and lossless varieties; are you achieving compressions with a 10:1 or greater magnitude losslessly? or do you have ways of minimizing information loss while still greatly compressing the image file?
The process begins at the beginning of a project, where I experiment with various compression ratios until I find the ideal match between file size and fidelity for the game I'm making. There's no one-size-fits-all here, but some developers barely even try that.
For example, in my upcoming game Supermodel, I use video to a much larger extent than in LLtP. One 22-second video file started out at a size of 394 MB when I first started working on it. By applying WEBM VP9 compression and fiddling with the settings, trying various options and seeing how they turned out, I ended up with a file that looks almost indistinguishable from the original but is only 11 MB in size, less than 3% of the original.
If you were to examine the video frame by frame or by zooming in on extreme details, you might be able to spot differences, but that hardly matters. I need something that will fit on most devices without burning up my very limited storage space.
I go through the same process with both images and audio. The files we start out with are meant for development work where that kind of thing matters, not for the final product where it absolutely doesn't. You want extreme fidelity when you apply effects, transitions, zooms, and so on in a video editing application. You don't need extreme fidelity in a video game.
If most developers stick images straight from their generation software into their game files, I assume it’s because they’re afraid of losing quality to compression? (Especially since many games don’t have a lot going for them besides the graphics.)
I can't speak for all of them, but I have heard their excuses a fair number of times over the years, even when I have directly called them out for their lack of compression.
Some are deathly afraid of any kind of compression, thinking that their game needs to look "pristine" (as if even a single player will notice anything other than the bloated file sizes). Formats like JPG have an undeservedly poor reputation in some circles, and this might cause some devs to not believe their own eyes when they see no difference between a JPG and a PNG, thinking that all their players will immediately see all the (non-existent) flaws and ditch the game (they won't).
Some just don't give a shit. This particular brand of adult game dev isn't in this for the artistry but simply wants to make a quick buck. This particular category of developer frustrates the hell out of me, especially since you can give them good advice that would improve their games considerably with minimal work, but they just can't be bothered (I know. I've been in this situation and been met with disdainful virtual shrugs). They just want to push their game out the door and cash the check. Fuck them.
Some lack the technical knowledge of how to compress anything or that there are options you can tweak. This kind of dev might think that all JPG files are the same. They might have seen horrible compression artifacts in poorly compressed JPG/WEBP files and think that this will happen to their images if they use those formats, or they think that using the default settings on their image application is all they need to do. In truth, most such apps turn the defaults far too much towards so-called "quality" settings to be safe, but have plenty of room for vastly improved compression ratios if the settings are even slightly tweaked.
And some might not even know that compression is a thing. They'll render their images in Daz Studio (or whatever app they happen to be using), get PNG files after their renders are done, then smack these directly into their game, unknowing that PNG isn't meant for games except in very rare circumstances.
LLtP has been lauded for its small install size ever since the first version was released several years ago. This saddens me. LLtP's compression shouldn't be the exception; it needs to be the standard. We deserve better.