I have no inside knowledge of Firewalk, but I can take some guesses, some formed by a small amount of lived experience.

The original team was probably a handful of people. I saw a quote that said that in some ways, this game has been in development for about 10 years, so probably a skeleton crew starting with the foundation for those first two years. Then probably bootstrapping a team of a dozen developers for the next two years. That would take us to about 2018, and we start to get into the venture capital era of video game financing in the wake of Fortnite and PUBG. At that point, they'd be building a thing that they know how to aim for, the Overwatch idea, and convincing investors that they'll achieve the hockey stick graph where their initial users will stick around, get others to play with them, and the audience exponentially expands. What's their hook? These cutting-edge graphics characters and cut-scenes. They're not cheap or quick to make. Then they're prototyping, testing, throwing things out, prototyping something new, testing again, and repeat. This is easily the next handful of years until they get a deal with Sony, then eventually purchased. COVID-19 happens in the middle here, too.

I'm sure some of the lean startup approach is discarded to fit in more with how Sony likes to launch a product, but while it would have saved them a lot of money that was blown on the sunk cost fallacy, I doubt it would have resulted in a much more successful game.