The AAA Studio Development Cycle Isn’t Working: Here’s How The Indie Game Developer Model Can Help

The AAA game studio development cycle is floundering in the face of economic headwinds and bloat. Long development cycles, inflated headcounts, and soaring budgets mean that major studios are struggling. Modestly successful games and critical acclaim no longer translate into a return on investment.

At the same time, empowered by the latest tech and fresh ideas, indie gaming developers are finding bigger audiences and generating larger profits. As the major studios struggle in an increasingly unforgiving games industry, indie developers’ natural focus on faster dev cycles, innovative game design, and new technologies could provide a valuable lesson for their AAA competition.

There’s Something Rotten in the Indie Darling to AAA Blockbuster Pipeline

Indie games have always been more experimental when it comes to pushing the boundaries of what is possible in gaming, with innovative storytelling, advanced gaming mechanics and bold designs to fully engage their audiences. In the past, the success of a sought after indie title often set the direction for AAA studios, who saw the rise in popularity of a new or resurrected genre as a safe bet.

However, replicating the format of a successful indie game with AAA budgets and elongated dev cycles all too often results in an oversaturated market, resulting in expensive and time-consuming projects failing where their more nimble indie counterparts succeeded.

For example, just look at the games industry’s latest craze: extraction shooters. Russian indie studio Battlestate Games’ Escape From Tarkov is widely credited with birthing the first-person shooter sub-genre, in which players enter a dangerous environment, usually in teams, to recover as much ‘loot’ as possible. Following the game’s success, more mainstream studios rushed out their own copycat games, like Rainbow 6 Extraction, or raced to include extraction shooter modes in their titles (Battlefield 2042, for example). The general consensus in 2025 is that the genre has become oversaturated, a fact reflected in wasted AAA budgets and dwindling playerbases. Meanwhile, Escape From Tarkov is still going strong.

It’s a more intense iteration of a story we’ve seen play out a hundred times, including with battle royales and metroidvanias. AAA studios jump on the bandwagon and crowd the market in search of guaranteed success, only to see lackluster returns. This approach may have been good enough in the past. Today, however, studios need to be more agile if they want to catch the latest trend in an ever more rapidly evolving games landscape.

Indie devs have long been at the bleeding edge, not just when it comes to popularizing unfashionable genres and themes, but also bringing new technological innovations into the mainstream.

In the first-person shooter genre, indie title SUPERHOT captured a huge audience with its time freezing mechanical innovation and a successful follow-up VR release. As always, major studios quickly tried to piggyback off SUPERHOT’s success with time-manipulation games. Dishonored developer Arkane Studios teamed up with Bethesda to produce 2021’s Deathloop.

Despite its positive critical reception and respectable initial sales, its lack of total, industry-wide domination (along with the underwhelming performance of Arkane’s follow-up game Redfall in 2023) resulted in Microsoft shuttering Arkane’s Austin office in May of last year. Microsoft reportedly made the cuts because of a “reprioritization of titles and resources.” Reading between the lines, this means that higher-grossing games were going to see more investment and ones like Redfall that only did ‘okay’ would be abandoned. The 96 redundancies at Arkane (which still operates a small studio in Lyon, France) are part of a story that’s becoming increasingly emblematic of the indie darling to AAA blockbuster pipeline.

The industry can’t keep going the way it has been and expecting the same results. We’re living in a different world. Large budgets and multi-year dev cycles are a death sentence for studios if those investments don’t guarantee spectacular returns. Unless you’re a smash hit, you’re a failure.

As Usual, AAA Developers Should Look to the Indies

AAA studios have never had a problem copying indie developers’ homework. However, AAAs finding the current environment inhospitable should be taking away more from the indie scene than the genre of their next “sure thing”.

Rather than copying game concepts that are then developed using the AAA formula of a huge budget and long development cycle, major studios should be copying indie developers’ processes instead.

Indie studios are time, money, and resource poor. As a result, the successful ones focus on efficient design, faster dev cycles, and leveraging state-of-the-art tech to hit it big with their audiences.

The challenges of making an indie game often force many small studios to prize efficiency when tackling a new project. Indie devs will prioritize putting out titles with shorter-than-average game durations that still squeeze in enough fun gameplay to be worth a player’s time. Games based on simple concepts, with replayability that comes from procedural generation and quirky mechanics, rather than lavish graphics and bloat, are the titles turning small development budgets into huge profits. PEAK, made by Stockholm studio Landfall Games, is a recent example of a “short but sweet” game executed perfectly by a small team.

Because indie developers tend to focus on smaller games as efficiently as possible, they are bringing them to market faster. AAA games take somewhere between two and five years to bring to market. By contrast, indie studios are launching new titles in as little as 18 months. Are they as polished as a AAA release? No. But what indie darlings lack in gloss, they more than make up for in raw creativity that can often capture a huge, loyal audience.

Indie studios’ tendency to take big swings on new ideas also extends to technology. For example, XR gaming is exploding in popularity. Worldwide XR headset shipments are expected to hit 105 million units this year,  and the market is expected to be worth more than $100 billion in 2026. New platforms like the Meta Quest 3 and the recently announced Steam Frame are making the XR market fertile ground for indie studios to grow new audiences as XR gamers look for more family-friendly, social gaming experiences.

The AAA model is no longer fit for purpose. However, indie devs’ innovative approaches, combined with a willingness to embrace innovation and build smaller, more focused games across shorter dev cycles represents an alternative path for bigger studios looking to break the cycle of mediocre sales and mass layoffs. If they can’t do that, then the future of gaming may end up exclusively in the hands of its indie developers.