I'm old enough to remember baggies the first time. 'Avin it. Largin' it, even! Of course back in the late 80s/early 90s, when acid was popular (I mean the music, of course), rave became massive (say it loud!) and many gamers were to be found browsing through the racks of my local newsagent, to find that treasure trove much loved by gamers of the time: computer cassettes. Orange for Amstrad CPC, yellow for Spectrum? I forget which for Commodore 64... but yes, going entirely on some tiny screenshots and provocative (or not) hand-drawn cover art, finding a diamond in the rough happened all too rarely. These were all independently-created games, published by "real publishers" but the people involved could usually be counted on your hands.
After the rise of the PC in the 90s, Amigas and all the 8-bit machines fell into sharp decline. More and larger software teams were putting out games, and big boxes were in (and so was the hand-drawn art, thankfully). This era has a lot of collectables, and sadly to this day I cannot count System Shock in my collection, so collectable it is.
With the advent of the Playstation 2, and the turn of the century, gaming became big business. Small development teams were a rarity, and it was becoming increasingly more common to find AAA games being produced for PS2 or PC by teams comprising hundreds of people. The notion of "indie" gaming was a flicker in Jonathan Blow's eye. It would have seemed likely that the XBOX 360 era, with its stupendously high production values, would be the final nail in the coffin for "indie" or "independent" video and computer game production. Well, thankfully, it wasn't.
All of the three current major consoles have their "online" stores, and - particularly the XBOX Live Arcade - feature many independently-created games, including the mighty time-trickery of Braid. There are others that prompted this movement beforehand, but I mention Jonathan Blow and his game Braid, for a reason: Many will, and do cite it, as probably the most important independently developed game that was released commercially in recent gaming history.
And not even for the rather cool and quirky time-shifting gameplay. No, that wasn't important. What mattered was the notion that, again, an "indie" game could have commercial potential, and could even be distributed and sold on a major game console.
The short of it is, the last few years have seen an explosion in independent game design again. And not only for online game console stores, but for the more recent - and possibly even "bigger" - iTunes / iOS app store. There are now many and regular releases on mobile platforms such as iOS and Android, let alone PC, of independently-developed games. Often by small teams, or even just one or two people. Heck, the last game I purchased was Deadly Dungeons - a first-person action RPG for Android phones and tablets - and it was developed çalmost entirely by one person.
It is a good time to be a game developer.
More discussion and news on independent games can be found at IndieGames.com and TIGSource.
(As for my current progress, I am steadily learning the process of creating colour maps, normal maps, specular maps and alpha maps. Vital stuff, and I'm most of the way there already.)