Can you really make money from games? The short answer is YES.
Of course this is not actually news since a lot of players made and still make money by selling virtual currency, virtual items or power-leveling in exchange for real currency but most of this transactions were and are against the game policy. In World of Warcraft for example characters have been sold for hundreds of dollars and gold trading is still a common practice even though the game dose not allow it.
Very few games offer a legit way to buy or sell your virtual items or currency, probably the most known are Second Life and Entropia Universe (formerly known as Project Entropia) the pioneers of RCE (Real Cash Economy) gaming. Even though Entropia Universe, developed by MindArk, is a few years younger than SL , it blew some shattering records already, in 2004 and 2008 it entered the Guinness World Records Book for the most expensive virtual items sold to a player and then again in 2009 when a virtual space station was sold for $330,000. In 2010 a player sold a virtual resort on Planet Calypso for $635,000, it's safe to assume that he is the most successful gamer in the world. According to wikipedia in June, 2010 company MindArk AB released its 2009 annual report. They reported a cash flow of -18.6 Million SEK (-$2.4M). MindArk also says they have a signed letter of intent to sell their original virtual planet, Planet Calypso, for a price of $6,000,000 USD to SEE Virtual Worlds.
In the past years more and more games that allow virtual currency to be converted into real money were developed, most of them are browser based games. Probably the most successful one is Anno1777 with payments of over 200.000 Euro already made. Anno1777 an economical, political and military simulator, it gives you several ways to earn some real money, you can open companies, trade slaves, fight in wars and conquer regions, make forex like trades on the financial market and even buy your own island.
A newcomer to the stage is ProEconomica, a financial and political simulator were you can open companies, Joint-Stock companies and in the future Corporations. The game is still in Beta but has a bright future.