That doesn’t make sense as most of the money is invested long before a release date is even announced.

Preorders aren’t used to invest development, but rather recoup some costs. They also provide a signal to publishers that allows delays to happen.

You’ll still be in the “red” during your marketing push, especially since marketing is so expensive.

Not really, I'm going to give the worst example of all - Star Citizen (aka Scope Creep The Video Game) - which was IIRC crowdfunded, and according to the wiki page below remains the most expensive game in terms of development cost.

https://en.wikipedia.org/wiki/List_of_most_expensive_video_g...

These games rake in hundreds of millions of dollars. Games are bigger and fancier than ever because they have reached mainstream appeal and accessability. It has nothing to do with preorders.

Preorders just allow them to release buggy games in a beta state and patch it later.