Increases in production costs are outstripping increases in revenue

[albionus]

@legend11
What chadius said. The costs, except for IP licenses, are going to be more for an HD game than an SD/ED game not matter which way you cut it. True not every HD game costs $20+ million but the cheapest HD game is still going to be in the range of the most expensive SD/ED game.

@sqrl
I agree though mostly from a business standpoint. I think electronics companies are finally coming around to the fact that people are not going to new $3,000 TV's, $400 cell phones, $600 video game systems, $1,000 movie players every 3 years. The only reason they did a few years ago was due to the funny money mortgage game most people were playing though it seems many companies thought it would be permanent. I would be shocked if Sony and MS repeated their core mistake again next gen.

From a technical standpoint though home console games are not near photorealistic graphics or human like AI (although I imagine that one's more of a software issue than a hardware one). If they're smart they've delayed their plans, or perhaps the technology wasn't quite ready, but I recall reading over the last few years about 2K and 4K resolution TV's that would be released in the next few years. Should Sony or MS want the potential should be there technically to release another $600 "supercomputer in a homeconsole", again if they want to. Though I don't follow such topics regularly so the technology may be delayed or scrapped.

@chadius
I wish I could find the article but actually Nintendo was saying the Gamecube was near the limit of what an SD TV could do. I think it was at E3 2001 where Miyamoto gave an interview saying that and adding that Nintendo was looking at different ways to advance gaming next gen (which we now jnow Nintendo was toying around with the first Wiimote protoypes at that point in time).