Small, Independent game studios: a force to reckon with?

I've picked up from classmates and professionals I've talked to that working for a smaller game studio can often be a better experience, where employees can wear many hats and developers as a whole exercise greater creative freedom.

But do these really make a big dent in the large console industry?  Can they steal the thunder from the large publishers' sequel franchises?
And can they actually be profitable and grow while still remaining "independent"?
Will the increased usage of mobile devices for gaming increase demand for smaller, quirkier games?

I was encouraged from this Seattle Times article (Seattle is a known hotspot for game development).  The article reflected bits and pieces of what I've heard about "indie" game publishers, tied them together, and made me rethink how much power they could have in the industry.

The article spotlights Torpex Games. 

I liked how the article pointed out the problem with large, leading video game publishers erring on the side of caution, with huge budgets at stake and tight deadlines to contend with.  It's just easier to work with tried-and-true formulas.  (Currently the top sellers are sequels!  Not that I don't think there's any room for sequels in the market, but I think an asset of the game is the surreal creativity that developers can pull off.)

Many of the video games of the early 1990's were full of innovative forms, likely because of limited resources.  Lately, many of the leading games have become more like cinema that players have some control over.  Is there still room among customer demand for smaller developers who make up in good ideas what they lack in limited resources? 

According to the article, the key is in online downloads and purchases through consoles.  All of a sudden, this opened up the possibility for smaller, more offbeat games (>$50.00 anyone?).  Customers don't mind taking a risk on a new approach to games if it only costs 10 (or even 5) dollars!  Mobile gaming apps also contribute to this incentive for small, low-risk games, with lower overhead because they're downloaded digitally.

On top of this, Microsoft has even opened up an app to allow amateurs to develop for Xbox live.  Though Sony and Nintendo haven't jumped on the bandwagon yet, I think this still a sign of a trend towards a more "pure capitalistic" system.

However, the bottom line is that this trend probably won't overtake the larger console games as the staple of the industry, but could establish itself as a healthy supplement with many business opportunities.