Actually it kind of died out for a bit. During the PS1 and PS2 era, with the introduction of optical media and a push for mainstream quality, low-budget (and hence only moderately profitable) games slowly died out, while high-risk, high-return 'AAA' games dominated. That's not to say that people didn't make independent games at this time but they were rather niche. The Indie movement was in part a rebellion against that.