Gotta realize that a registry can merely be ran by less than 15 employees (I'd keep a small one that way to not be required to comply with E/O). Supposing the application and legal fees were $500,000 for that ngTLD and their average income for each employee is $60,000. That's only $1.4m.
Now, everyone can own everything.theirdelegatedstring.
Take dotLuxury (average price of $550 per domain) for instance. I don't know (or care) how many employees they have or legitimate domains. Let's just assume all
1236 dotLuxury domains paid full price. That is $679,800 after launch and under the assumption of rough costs, 50% of what they've invested. Not bad.
Now rewind to ICANN announcing that fees will be reduced for registries for their dotCrap renewal, the end user price to renew or register remaining the same and they still have dotLuxury renewals and registrations going forward.
It's a bad string with a high price tag, but it can be self sufficient, just like many others (without crunching too many numbers such as office space, taxes, etc. and keeping it simple).
For example, doing rough numbers on
dotNinja, they have 18,751 domains with a $15 average price. That's $281,265 which is nearly $100,000 in "profit" and could be ran by 2 people, which is a sweet 50k each for filling out a piece of paper and sending $185,000 in (with hopefully projected growth, but either way, I don't think they'd care if another registry had to take them in if they did in fact profit).
I don't know how a registry works, but I do know for sure they have minimal clients to deal with as they primarily do business with registrars. That dramatically reduces their operations because they don't need 1,000 customer support agents dealing with questions like, "How do I change my name servers?... What is a name server?"
Food for thought and shows you that a lot of people will buy dotCrap allowing the registries pocket big bucks in comparison to what they do verses a registrar (plus they can auction off "premium" names later, which some have done so far) with the registrars being the ultimate winners in this game and domainer's losing their life savings if they're not careful.
* Not taking in consideration fake registrations, parked names, etc.. I'm being optimistic and stating they are all real in these numbers. We know .xyz cooked numbers, which is why you have to be somewhat pessimistic in the others, but math was much easier this way to make a point.