Original Comment by: Mark
You hit the nail on the head. Conventional wisdom suggests that the tremendous bloat of video game budgets makes it impossible to develop a competitive game that cannot sell half a million copies. Now, the indie gaming scene provides at least one counterexample, but who plays (or even knows about) indie games except people who have video games in their blood like a nicotine patch?
Unfortunately, before art-house games become really viable and common, the mainstream must be expanded. In addition, games need to find new ways of expressing themselves. People talk about games as art, but games more profound than an action flick are extraordinarily rare, and those few that say more aren't entirely clear on what they're saying. What's more, the few politically themed games there are floating around either base it around a painfully heavy-handed partisan message, or are so afraid of getting bad press from one side of the aisle or the other that they very carefully refrain from saying anything at all. Granted, a part of that comes from the hyperpolarized political climate that exists worldwide... and political games are still pretty heavily US-centric....
It's a very tricky puzzle indeed, and I think in the long run no amount of concentrated effort from developers will be half as significant as the market forces that are making Flash game portals and MMOGs into a huge market.