I have been looking a lot lately to find composing work, sometimes not even paid but just contributing a few tracks to a project to get credited but I'm not sure where to look, I've made some posts on reddit but couldn't find much recently. I love making music but don't really know a lot about the industry but from what I can imagine its quite a small community of composers that get the majority of work and projects to work on and directors and developers will keep coming back to these composers time and time again.

Which is fair enough, they don't usually want to take a risk with an unknown, it just seems theres a lot more supply than demand with composing work, although any insights would be appreciated. I mainly like to do transcriptions and piano arrangements of videogame music but would also like to compose some music for original projects too if I get the chance.

All I can add is that the issues identified in your initial post are exactly right. The amount of audio work per game is small relative to the total amount of code, art, and design work, so it's possible for the whole industry to be adequately served by a relatively small and elite set of composers.

It might be possible to get your foot in the door by looking at games currently under development - e.g. by browsing the Indie Projects forum here, or even looking at Kickstarter - and seeing if your work would be a good fit for these games. These games are much more likely than most to have no composer lined up yet, so they may be more open to suggestions. The downside is that they may not ship at all. :) (Ensure all your rights revert to you, in that event.)

Thankyou for your replies and advice, I'll check out the indie projects posted on this website too