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I love how many people in here think that simply upping the resolution of a title is what makes ps3/360 development so expensive.

I hate how HD is just a buzzword now, and so many people toss it around without having any idea what it means. HD gaming, etc.

Outside of FMVs, the fact that games are rendered in 720p or higher resolution has little bearing on their size. I could run 10 year old PC games in such resolutions if I wanted to. They don't suddenly become larger as a result.

What makes up the bulk of the cost is the time spent designing larger environments, models with much higher polygon counts in the past, and creating higher resolution art assets to cover these models (note: texture resolution has no bearing on rendering resolution!). There's simply more of everything, provided they actually try to push the limits of a system. However, you can still easily have an HD game that costs less than the average ps2 game. Flow would be one such game. It renders in 1080p, and thus is as HD as you can get, but its design is incredibly simple.