As far as I know 40$ is still considered a budet game, and more akin to AA. Also you do realize that 'Indie' literally just means without help of a major publisher/self published? It says absolutely nothing about the quality of the game, if it's Indie or not.
Besides, pricetags are determined by production costs like engine (or possibly building an engine), teamsize, electricity bills etc as well as production value and content. By his own admission Jonathan Blow has poured several millions of his own money into making The Witness with a decently sized team. All these expenses need to be paid. Would you rather people doing the exact same Job get paid less, just because they aren't backed by a publisher?
This vid by the way, looks nice enough, but this has absolutely no bearing on the Witnesses price.
In the end The Witness is a 100 hour puzzle game and this one is going to be a 2-hour hack n' slash. Even if both of them offered the exact same high production values, The Witness still has consideraby more content.
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