Those games are a grain of sand in the infinite desert that is the indie game world. The vast majority of indie games on Steam are barely even noticed by anyone.

> Is it incredibly rare?

There are thousands of new games each year. The handful lucky outstanding low-budget games won't put anyone to shame.

> There's an uptick in indie devs that have broken through the barriers with good gameplay despite the graphics not being AAA quality.

Don't confuse indie with AAA. Indie is about control, AAA about budget. There is usually a correlation between control and budget, but there are also many long-running indie-devs with good budget now. Supergiant, who made Hades 2 for example, are such an AA(A)-Indie.

> Edit other games that come to mind: Hollow Knight: Silksong, Hades II, Schedule 1, and R.E.P.O. > More obvious examples: Minecraft, Terraria, Factorio were all indie studios as far as I am aware. Minecraft being one of the most successful games at 350 million copies sold.

Those are long-running, genre-defining games, which also received a good budget over the years. Many of them are in the realm of AA, probably AAA now. Those are naturally grown services-games which could grow from success to become even more successful. Big studies tried to emulate this in the last years, but ultimately failed big in most cases.

The general problem is, the bigger your budget, the bigger the anxiety, leading to more control, conservative micromanaging and throwing every shit into the game to cater as much people as possible, which in high numbers cannibalizes the market eventually. Low-budgets can take on more risks, focus on their gaming-mechanisms and don't have to sell big. Making small money to cover your costs is already good enough, and they all can always explode by luck if they get their marketing right.

Games like Schedule 1 or R.E.P.O. don't have to offer 100h+ of fancy fun and high level entertainment. People are happy if they can get their 10+ hours of fun out of it, because they didn't waste big money on it anyway. So you will always see cheap games occasionally explode for a short while, while everyone is waiting for the big games going on sale, especially when the cheap games are coming with a social aspect.

> Is it incredibly rare?

Yes. It's incredibly rare. And suggesting otherwise is silly. Go ahead. Compare all the indie games released and see how often they succeed.

Sure, you can find successful ones, but you are ignoring those that do not succeed. There is a name for that, you know—survivorship bias.

> It seems AAA game studios are missing what gamers want at every turn.

I’m really not sure what it is. Usually, when a company begins to abandon/shaft their user base like that, it’s because they found a more lucrative market to chase instead.