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Kyros said:
HD development costs are extremely high


HD development costs if you want Killzone2 looks. If devs want to make cheaper worse looking games, they can achieve Wii looks on PS360 much cheaper than on Wii (no need to optimize ANYTHING)
Likewise Wii games that look good and have similar features than PS360 games will have much higher costs than a de Blob where you are a blob that colors boxes. If you believe that Super Mario Galaxy was cheaper to develop than Lair you dream.

I mean of course No More Heroes did cost less than GTA4, but it did cost much less than GTA San Andreas as well.

 

Factor 5 (the developer of Lair) is one of the companies who talks about how much more expensive it is to produce a similar HD console game than it is to produce a Wii (PS2/XBox/Gamecube) game; so I think you're the one who is delusional if you think that many Wii games will ever approach the development cost of Lair.

Beyond that, it is possible for developers to control their development costs and to produce games with more modest visuals ... but you also said " ... a PS360 game that looks like a Wii game would be ~ 0"

 

From what I can tell, your entire philosophy towards gaming is that any company who can not afford to produce a game with a $20,000,000 to $40,000,000 budget should die out rather than to focus on something other than visuals. Personally, I really enjoyed games like Okami, Shadow of the Colossus, ICO, Katamari, Killer 7, Viewtiful Joe, and several other games which will never approach 1 Million units sold; and I would much rather have those developers focus on the quality of game and stick to more modest visuals (potentially being released on the Nintendo DS, PSP, or Wii) than to have these developers go bankrupt because they can't receive the sales of another generic FPS.