Those costs can easily be cut in half with reservations. Its likely there's a lower-bound of the number of reserved instances they use as a baseline performance guarantee, then they use on-demand to scale above that.
No one at their scale actually pays the list price.
Basic math: There are ~100 players in each game. At a 30 tickrate, that's 3000 RPS per game minimum. Each of those requests likely involves a number of 3D math calculations, including hit detection, collision detection, real-time cheat detection, etc. Those updates then need to batch back to the players at 30 tick. All of this needs to happen with as little eventual consistency as possible; a difference of milliseconds degrades the player's confidence that the server is correctly calculating what is happening in-game.
Point being; multiplayer game programming is an entirely different beast than normal web programming. The same rules don't apply. Its an n^2 problem where every additional user in one "lobby" actually increases resource utilization exponentially because you need to update every other user's game-state with the actions of that new player. Additionally, Battle Royale style games are the most demanding multiplayer games ever created. Games like WoW have way more players per realm, but servers only need to worry about the interactions of a select few in your surrounding area, and it doesn't have as stringent real-time requirements. Games like CoD only load in 5-20 players.