The development cost of a game is directly related to the number of people you require to produce the game, the duration of the project, and where the game was developed. Although there is no perfect estimate, when you consider all costs associated with having an employee (Wages, Benefits, Office Space/Supplies, and support staff) a decent estimate for the cost of development is (roughly) $100,000 for every many-year of labour ... From what I know about the ammount of development required to produce games these are the estimate:
Low Budget Nintendo DS/PSP game: 3 to 5 developers working for 9 to 12 months ($225,000 to $500,000)
Average Budget Nintendo DS/PSP game: 8 to 10 developers working for 9 to 12 months ($600,000 to $1,000,000)
Big Budget Nintendo DS/PSP game, low budget Wii/PS2 game: 12 to 15 developers working for 12 to 18 months ($1,200,000 to $2,500,000 )
Average Budget Wii/PS2 game: 18 to 30 developers working for 12 to 18 months ($1,800,000 to $4,500,000 )
Big Budget Wii/PS2 game, Low Budget PS3/XBox 360 game: 30 to 50 developers working for 18 to 24 months ($4,500,000 to $10,000,000 )
Average Budget PS3/XBox 360 game: 50 to 100 developers working for 24 to 36 months ($10,000,000 to $30,000,000)
Big Budget PS3/XBox 360 game: the sky's the limit
Now, there are ways to lower development costs like outsourcing work to China (as Epic among other developers have done) but this is a strategy that works with all levels of development.
Why the PS3 and XBox 360 games require so much more work is that there is tons of detail work that is required to make the high detailed graphics, and to create the data necessary to create the texture effects (like normal mapping).
Edit: noticed mistake
