Quote: Is it possible to compete with the world market?
A lot of very successful independent developers have showed that you can make it as a 'little guy' in the markets this industry already provides. It's just a matter of gaining ground in the right ways.
A clever game design that doesn't require massive amounts of development time - or deployment on to a games console - is all it can take to get recognised and therefore be taken seriously by a publisher the second time round.
Quote: Finally, what other businesses in the field of game development is good and have a high demand on it?
As a small startup forget about XBox or PS2 development kits. Theres a massive games market waiting for you already. Where the tools required to make games on it can be acquired freely and legally - PCs.
Developing just for the PC has other benefits besides cost. It's far easier to distribute your game over the internet (That's another thing - forget about seeing your first game in a box on store shelves) and the internet itself is a great way to advertise and build up a cluster of dedicated customers.
Quote: can some one give me an estimation of the capitial needed for this type of business
For what you want to do: A lot. For what I'm suggesting as your best course of action: Near nothing apart from labour costs.