With animation u can compete (with larger studios) by being good or better in one or more of 3 areas. You can be the better animation programmer and solve the animation problem procedural, or you can be the better animator and trump the competition through better hand animation or you can find a better mo-cap solutions and solve it through your physical performance. There are cheap mo-cap solutions using Kinect, much less than a mo-cap studio, but you'll have to do more cleanup and since it is mo-cap your physical performance has to be good, otherwise it will show up in the game. It's definitely possible for small studios to compete on animation.

Here are some links demonstrating the 3 principles..

http://www.reallusio...cap_device.aspx
http://www.3dmd.net/...ssion-5708.html
http://www.naturalmo...ducts/euphoria/

Good Luck!