This math is missing a step: $200k went to your publisher who already gave you the $200k, so really you got about $394k total (before your taxes).

And it's worth remembering that your publisher got $194k ... I'm not sure if this publishing arrangement makes sense for the publisher ($200k risk for not much more reward?) or for you (30% of your net income from the game, after valve's 30%) (I'm not in the industry so honestly I just don't know)

This step is certainly not missing. And yeah I somewhat simplified the agreement not to go into details. Usually publishers that invests money take 80-90% or even 100% before full recouperation of investments. This usually includes not only provided budget, but also whatever publisher spent on porting, QA, localization and LQA.

Then after recouperation is complete all income is split between 50/50 and 40/60 for either side. And yeah in gamedev ROI like x2.5 is a good deal for publishers even if 90% of games never recover development costs.

Everyone just hopes to make the next hit and make a bank.

PS: This is math for indie and AA games with budgets under $5,000,000.