The way it basically works is, that you get a phonetics-alphabet and learn just the sounds and then you write them down in the way you think is right. My class was, in direct comparison to the class that learned traditionally, on average half a grade better in writing and reading by year 4. But my class had only eleven pupils and our teacher had the chance to explain errors and nuances. Usually, classes nowadays are more than double the size.
I am sure that, without proper guidance, many mistakes can be made. The primary thing my parents loved was, that I was able to read stuff the first day I came home from school with my phonetics-alphabet. I could read my children-books from day one. We didn't start with the letter "e" or "o" and only short words. This gave me a real thirst for books and I read "Robinson Crusoe" in second grade.
But all in all I don't believe gnome's development cycle is unsustainable in the foreseeable future, even with shrinking interest in the desktop as a whole.
"We started ZeniMax Online from scratch, with no employees and no technology. We had to build everything ourselves. It takes a long time to write game engines, especially MMO engines, which are inherently more complicated than typical single-player ones. So, we decided to license the HeroEngine to give us a headstart. It was a useful tool for us to use to prototype areas and game design concepts, and it provided us the ability to get art into the game that was visible, so we could work on the game’s art style."
Or as the title of the article says: "Why The Elder Scrolls Online Isn't Using HeroEngine"