(the amount earned grows with the amount of virtual drugs in production, so more players = more payouts)

Interesting way of looking at it. Actually, the STEEM that people spend on the game goes into a pot (89%?) and each day part of that pot is paid out pro rata to the players, based on their own share of drug production.

More players equals more payouts only if you are growing your production faster than the member base is growing, and the pot is growing faster than it is being depleted through payouts.