Right the FPS market is arguably the most competitive market right now in video games. They are hugely in demand and the market is largely dominated by a few big players. It's pretty damn hard to make a splash when you don't have the massive budgets and talent pools of those big companies, let alone try to make a successful game that strives to "innovate."
Not just the competitive nature of the FPS market, but also the cost of it, developing a complex and wholly 3D game is a lot of work, which means it takes time, and time is money..
This is why most indies start out with simpler and more casual 2D or even browser based games (think Bejeweled and Farmville), you can make thouse in a fraction of the time, and beeing far simpler games, it's harder to screw them up, so if you can just get them out there in the public eye, they are a very safe investment, and you don't need a lot of starting capital to get in on that market (though that's not to poo-poo the efforts of such indies, some really great low budget games have come out of it!).
It is getting easier now, with things like the UDK and Steam, but of course, when TWI did it, there was no UDK, and Steam was a buggy upstart that most people did not want to trust, it just haden't proven itself yet at the time, and was only home to a handfull of games (most of them Valve's own).
When you really think about it, it's no small feat that Ro:Ost even got made, let alone got released and went on to become a success, and it took some serious courage and hard work for that to happen.
I've allways known that, but i did think TWI started out with a budget more than twice what they did, so knowing how little they actually got as the cash prize, it's all the more impressive to me.
