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Creativity is so idiosyncratic, I'm not sure you can ever distill any method or approach as yielding superior results to any other, because it's all just so dependent on the creatives involved, and the times they existed in.
That said, something clearly went very, very wrong with independent studios in the 90's. There seems to be a reoccurring theme where success begets failure. Where then a bunch of 20-something (probably autistic) manchildren find themselves with millions of dollars, they go down some incredibly terrible rabbit holes. They turn their offices into playgrounds, they endlessly chase some perfect creative vision, many lose the will to do actual work entirely.
I don't think it's as bad as the lottery curse or NFL millionaires. I think many of them walked away from the industry never having to worry about money again. But their successful creative prospects more or less died after their first life changing hit.
I think Westwood, Blizzard, Maxis and id Software held out the longest. I'm not sure why honestly. Possibly the 20-somethings who won the lottery were better prepared to handle the success. Which is not to say the quality of their games never tapered off. But you didn't see these catastrophic collapses the way you saw with Origin, Bullfrog, and others. Technically id Software still exists, if in a nakedly Ship of Theseus kind of way.
I think the 90's was the tipping point where a small number of people with a vision in gaming could do a lot with not a lot. (Arguably we are maybe returning to that with the advent of AI tools and the like?) I learned to program in Basic on a Commodore 64. I could in the 90's make simple games on a 386, that didn't look much off what professionals were doing. Soon after that, the number of people you needed would increase, and the amount of time I think.
So you got just got an expansion of who could get into being a game designer. But without necessarily having to have any kind of business acumen to run anything bigger than a few people working together. Maybe not just video games, Games Workshop was on the verge of collapse until it was bought out by management (rather than the designers) and turned in a more commercial direction in 91.
Creative Assembly is maybe the anti-example, founded in late 80's with a tiny workforce and increased in success until they could afford to do Shogun in 99. Bought out by Sega in 2005 after success with Medieval and Rome Total War which is when Tim Ansell got out. So he was able to scale it up from doing ports of MS-DOS games with 2 people to a hundred with 3 well regarded games under their belt when he sold it. Whether he could have scaled it to where they are today is an open question (though so to is whether Sega have been great at that either).
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At least for id, I think it's in large part because Carmack is both a workaholic and a genius, so even as he was buying Ferraris and starting space companies he never stopped grinding away. He never really let himself rest on his laurels. Rage is probably the worst game they ever put out (prior to Carmack's departure), and it was half decent.
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