Kac's conjecture from Nakajima quiver varieties

We prove a generating function formula for the Betti numbers of Nakajima quiver varieties. We prove that it is a q-deformation of the Weyl-Kac character formula. In particular this implies that the constant term of the polynomial counting the number of absolutely indecomposable representations of a quiver equals the multiplicity of a certain weight in the corresponding Kac-Moody algebra, which was conjectured by Kac in 1982.