No. You are only making software that doesn't usually get sold. Most of it isn't, but you can custom-develop - building upon piles of other free software - and then license it under a free license to your client who chooses whether to share it (always under a free license) or not. Free software can be sold. I know this because I did it a lot.
> It's hard to be rewarded for free software
OTOH, it's much cheaper and easier to develop it. With closed software, you have to invent your own wheels. With free and open-source software, you are free to use the ramjet engines other people have developed.
Again, you're outlining a highly specialized business plan for custom development — not a general principle for making money with FOSS. If I freely license my next game, I'll lose my shirt. If I create an awesome, game-changing productivity suite and GPL it, I'll lose my shirt. If I do anything outside of some very tiny niches, I'll lose my shirt.
There are a few small areas where FOSS is as commercially viable as anything else, and you'll notice those are also generally the areas where it seems to be most mature. You can't generalize those tiny areas and say that making open-source software in general is a reliable income source.
It's not possible to make a business out of selling goods that are infinitely abundant. Free software is one such thing.
Making open-source is not a direct income driver and, apart from very limited niches, will never be, but, nevertheless, it allows a business to have full control of its technology stack.
Company A builds a great game using a closed-source library built by company B and company C builds another great game using, say, an LGPL library. When the underlying platform changes, breaking both libraries, company C is not subject to whatever the strategy of company B is and, therefore, can be first to market with a new, compatible, version.
This is a hypothetical situation, of course, but illustrates one important thing about free software - most people don't really make it: they use it and, from time to time, and, if and when the need arises, add a little improvement here or a fix there. Its strength lies in the sheer number of people that give a little hand, scratching one another's itch.
No. You are only making software that doesn't usually get sold. Most of it isn't, but you can custom-develop - building upon piles of other free software - and then license it under a free license to your client who chooses whether to share it (always under a free license) or not. Free software can be sold. I know this because I did it a lot.
> It's hard to be rewarded for free software
OTOH, it's much cheaper and easier to develop it. With closed software, you have to invent your own wheels. With free and open-source software, you are free to use the ramjet engines other people have developed.