Video game developer Ben Esposito’s first big break was a quirky game called Donut County starring a raccoon who dropped small objects and then entire neighborhoods into an ever-growing hole in the ground.

His latest, Neon White, is a campy twist on the first-person shooter genre that involves careening across heaven at breakneck speeds to stop a demon invasion. Drawn in an anime style and with a romantic subplot, it’s nominated for “Best Indie” and “Best Action” game at Thursday’s Game Awards, an Oscars-like event for the video game industry.

Every year, some tiny and independent video game developer studios like Esposito’s Angel Matrix hold their own with the big leagues by making hit games that achieve commercial success or at least critical acclaim. Even one of the world’s most popular games, Minecraft, was started by an independent game developer in Sweden who later sold his studio to Microsoft for $2.5 billion.

“I have really odd taste,” said Esposito, 33. “When I’m picking stuff, it’s about trying to come up with that rare intersection of something that is offbeat and interesting to me, but if presented the right way, it could be financially successful.”

How long these “indie” studios can flourish is up for debate as the gaming industry undergoes increasing consolidation – symbolized by Xbox-maker Microsoft’s pending $69 billion takeover of giant game publisher Activision Blizzard that awaits approval from U.S. and European regulators.

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Esposito, the game’s co-creator and director, and his wife, co-creator Geneva Hodgson, worked out of their home near Los Angeles to lead development of Neon White over the past three years. At the height of production, about five people worked full time on the game. Add friends, contractors and freelancers and it was still fewer than 20 people who touched the product, Esposito said.

And while there’s no one formula for transforming an offbeat idea into a blockbuster hit found on computers, phones or a family’s PlayStation, Xbox or Nintendo Switch, there are plenty of indie studios that have managed to build an audience for their games.

Thursday’s Game Awards event in Los Angeles is showcasing several. Those include the French-made summer hit Stray, about a cute cat navigating the alleyways of a post-apocalyptic city; another game about a cult led by a possessed lamb; and the retro-looking Vampire Survivors that pits its hero against a constant stream of monsters.

But as the industry keeps consolidating, some developers including Esposito worry that a golden age for high-quality indie games could be threatened as a smaller group of distributors makes choices about what gets funded.

“When it comes to bigger budgets, it’s a challenge because the industry feels like it’s contracting a bit,” he said. “Studios get bought up. Talent gets concentrated into certain areas and then budgets change.”

Games that Esposito describes as having middle-tier budgets in the $2 million range — neither cheap to make, nor as expensive as the major studio franchises — could get sidelined.

“I think we’re seeing that kind of mid-budget game start to disappear,” he said. “I think that’s really sad because that’s the kind of budget that I think can produce really interesting, odd, risky but well- realized projects and I think Neon White’s one of those.”

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