As an outside observer, indie game development is still doesn't seem sustainable. I've read too many stories of people with initial success and try to build a company around it to finally fail. There are too many variables in play to build predictable revenue.
There are of-course exceptions, it mostly involves making as many games as possible and praying one of them clicks (Zynga, Rovio etc). In such a market, the competition is ruthless. Both perfect competition and complete monopoly are not favourable[1].
[1] http://blakemasters.com/post/20955341708/peter-thiels-cs183-... (Read from "IV. Capturing Value")
However, with over 700,000 apps on the app store, it's incredibly hard to get noticed at all. Therefore I think there's some value in working on something over a longer time frame, trying to build up a community around it.
Back around September of last year Jay and I were at a bit of a crossroads - keep going with ZOS/C3O, or switch to something else. In the end we decided to part ways, Jay left Binary Space in December and I decided to keep making updates for ZOS and C3O. I'm buying out Jay's share of Binary Space by giving him a share of revenue for the next several years.
Back in 2010-2012 we were trying to build Binary Space into a legitimate business - ie something that could support us full-time. I agree that indie game dev is incredibly hard to make a living from. I've now scaled my ambitions back to it just being a hobby. It's a fun hobby though, and it makes enough money to pay for itself :)