I kinda agree with you on the fact that HD and high graphics development is getting more and more expensive cause these developers go all out and spend millions and millions just to make eye candy. Then when the game does sell it only sells enough to cover the development costs leaving very little profit.
But on the bright side dev costs can easily lower down ever 2 years due to moores law (correct me if im wrong). so as long as no developer makes an expensive game like Shenmue or GTAIV then they can make some nice proft.
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