Denis Fedorov founded Unfrozen, the studio behind Iratus: Lord of the Dead and Heroes of Might & Magic: Olden Era. He also leads Nova Assembly, a holding company co-owned and run by five studios that share development and marketing expertise, while retaining their creative freedom.

Between intense competition, difficulties in securing funding, rising development costs, and increasing financial risks, the traditional business models across the video games industry have been thrown into disarray over the past few years.

Despite fierce competition and these additional challenges, 2025 saw indie developers and small teams prove they can compete with major studios. Consider the commercial success and critical acclaim of Clair Obscur: Expedition 33 and Kingdom Come: Deliverance 2, made by smaller teams and on more sustainable budgets.

But it's worth keeping in mind that such breakout hits are outliers, as many independent projects have gone unnoticed. Let's figure out what should be included in a survival strategy for indie games to improve those odds.

Layoffs reveal the fragility of the single-project model

Industry layoffs – which escalated sharply in 2022 – have affected major studios and small indie teams alike. GDC's 2026 State of the Game Industry survey found that 28% of respondents had been laid off in the previous two years (rising to 33% among US respondents). This represents a historic loss of institutional knowledge and talent that is likely to impact the next generation of games.

Declining revenue, restructuring, and rising development costs all highlight the same structural problem: single-project studios have no buffer when something goes wrong. One cancelled publishing deal or an underperforming launch can wipe out years of work, and can potentially be terminal for the studio.

While this only applies to self-owned teams, to secure long-term stability it's wise to structure your studio for resilience before you need it. Maintain a financial runway of at least 12–18 months, independent of any single project's performance. Run fast-iteration prototypes to validate ideas before committing full teams.

A multi-project model does not have to mean putting two full games into production at once. Start by testing what comes next while keeping the main project properly staffed.

Don't rely on a publisher

For years, the solution for indie studios struggling with funding was to find a publisher. This meant development funding, marketing support, and platform access in exchange for revenue upside and, in some cases, creative control and the freedom to make independent decisions about your own product.

Alternatives to traditional publishers are emerging, such as Outersloth | Image credit: Outersloth

But even experienced publishers are struggling to support independent projects. They prefer to play it safe and invest in projects with proven metrics and audiences. Marketing has become more expensive and complex, even for indie games. There is less experimentation and more cost control.

Still, indie developers now have alternatives, like self-publishing and early access. Partnerships have become more selective and harder to secure, but new options are surfacing, such as dedicated indie funds like Outersloth.

Don't think you have to do this alone

This is where the indie sector often misleads itself. When indie developers work in isolation, they can lose perspective, especially when working on longer projects. Without feedback from the community and early prototyping, it's hard to build a viable product.

When you're working without a publisher, you have full control over your IP, your team, and your decisions. On the other hand, any technical bottleneck or production crisis can become a major challenge for an inexperienced team.

Unfrozen, maker of Heroes of Might & Magic: Olden Era, is one of five studios that make up Nova Assembly, along with Sad Cat Studios, Vea Games, Game Garden, and Weappy | Image credit: Unfrozen/Hooded Horse

For indie developers, collaboration with like-minded studios is non-negotiable. Studios can support each other during development, share expertise, capacity, tools, and honest feedback. All while still being in control of their own IP, team, and direction.

Maintaining an active dialogue with players is equally important. Early feedback helps developers identify weak points before they turn into costly production issues, while player reviews, testing, and early analysis should actively shape development priorities. Showcases and public demos remain some of the most effective ways to gather that feedback and observe player behaviour in real time.

Don't settle for an average game

Last year, indie developers proved they can compete with major studios. Alinea Analytics estimated that indie games accounted for around $4.5 billion of Steam's revenue in 2025, more than a quarter of the platform's revenue. Limited budgets didn't stop developers from creating outstanding, high-quality games.

The market is crowded, and players are spoiled with a variety of options. In this environment, mediocre, hastily made products simply can't compete; they don't make it past the initial stage. A few years ago, an average game had a reasonable chance of average sales. Today, it's just impossible. As Yura Zhdanovich of Sad Cat Studios put it in Edge issue 420, "Being 'OK' is the same as being nothing."

Sad Cat Studios is behind Replaced, released in April this year | Image credit: Sad Cat Studios/Thunderful Publishing

Define your game's core differentiator before you start coding. Be clear about what makes your game stand out and why players would choose it over dozens of similar titles. Test the hypotheses quickly and start marketing early once a hook is found, to ensure the audience is ready and hungry for the game when it's ready.

Keep your best people

Layoffs might become an inevitability – there could be a point when sharply reducing your company's turnover is the only means of survival. But it is critically important to retain employees who form the studio's "core": the developers who preserve internal expertise, production continuity, and the team's creative chemistry. Your most experienced staff are your most valuable staff.

More generally, a small team of committed, experienced developers will outperform a larger outfit of disengaged ones every time.

Don't try to outspend AAA studios

Volatility has become the new normal, and that's the issue: we either adapt or leave the market.

Small studios can no longer compete with AAA in scale, but they can in creative vision, atmosphere, bold ideas, and the emotional experience that large projects often lose due to massive production and the attempt to appeal to everyone at once.

However, creative identity alone is not the only key to success. Long-term resilience now depends on sustainable teams, close player engagement, and the ability to adapt quickly without compromising that vision.

The studios that can balance a distinct creative voice with disciplined production will be the ones shaping the industry when the next market shift arrives.