If it wouldn't work in the long run, then why is gamestudio still alive and running around?
UDK, Unity, Torque, they may all be a bit better than gamestudio in general, but not for starters and quick mockups. That's where gamestudio's strength lies. And with conitec's GALEP business, I don't think they NEED to earn much money from gamestudio. I'm very happy this engine is not depending on making money (at least I think). Development ain't very fast, but it's stable, steady and still going.