It seemed like a good idea at the time. Microsoft wanted to give indie game developers a chance to see their creations sold on its Xbox 360 console via download but without have to go through the typical publishing hoops that are needed to get a game released on the regular Xbox Live Arcade service. The final result, launched in 2008, was called Xbox Live Community Games. The name was later changed to Xbox Live Indie Games.
However, as reported by Ars Technica, indie game makers looking to make some money by releasing their creations via Xbox Live Indie Games have mostly been disappointed with the results. Part of the reason is the sheer number of games that are available to purchase and download on the service. As of last February there were over 1,600 games available to download and many of them are not exactly of high quality. The result is that even well reviewed games can get lost in the forest of bad game titles. One example in the article is a game called Sequence from Iridium Studios. A mix of RPG and rhythm game genres, it got solid reviews but in the end the developer has only sold 2,000 copies so far.
There are exceptions to this rule. One recent one is FortressCraft, a fairly obvious "homage" to the best selling PC game Minecraft. It sold 16,000 copies in just its first day. Another is Avater Paintball, which the story claims has generated hundreds of thousands of dollars in revenue for developer DigitalDNAGames. But those kind of successes are very rare and it's unclear whether Microsoft might step in to make the Xbox Live Indie Games business more successful for its developers. In the end, making games for Xbox Live Indie Games might be a good learning experience but indie game developers should not expect to be rolling in money when they release games via the service.