What your friend said is true, but some things were left out. Since you’re budget focused, I will assume that you are the only person working on this game:
1.Although its a good idea, you don’t have to register a studio name, if it’s only yourself. Games CAN be made and published under your own name. That said, if something goes wrong (you get sued, for example) having an LLC or better would keep you safe. That will run you around 180 USD. This includes price of owning the name/trademark. Having an LLC also allows you to have a few employees/crew, but you CAN skip the LLC if you’re working solo.
2.You do not have to rent an office ever, it is not required. You can use your home, office, or any place that you own and development occurs there. Guy in a garage? The address of the garage is your “office”.
3.Developing and releasing cost nothing, literally. Unreal engine 4 is free, and if your game is functional, there are several people who would release it for free. Gog, desura, Humble bundle and even Steam, although they are the hardest to get your game on.
4.There ARE free alternatives. Blender, Unreal engine 4, Gimp, Audacity, etc. These are tools of the trade when you’re low budget. If you can’t afford the game you have in mind, you can get funding,publisher support, backing, crowdfund, or use a smaller game idea that would be just as entertaining to sell, just to get funding for something larger.’
5.Yes, using software without a license would mean you do not own it, which is in effect stealing.
You’re right, indies don’t have that kind of funding. Look at minecraft. Notch and one other guy (Jeb, if I recall) Made that game together, artist and coder. It took them years, and they used their own website to sell it. That cost them probably 20-30 dollars a month (rough estimate of website costs.) after that, they took the money they earned with early access sales to hire a team, making the game better. It then got the attention of Microsoft, who bought it for a billion. Now technically, he is free make any game he wants, from just that one game sale. I’m not saying every game would be minecraft, but the idea still sticks: Start free, start small, work your way up.