I think studios need to severely cut back there budgets. There is def something wrong when a company like THQ goes under when the have many million selling franchises like Saints Row, Homefront, Darksiders, WWE, UFC. Or square losing money despite Hitman, Sleeping dogs and Tomb Raider all selling well.
I dont know how true this is but I read a long time ago that the average 6th gen game turned a profit after about 300,000 units sold, what the hell happened? I think there needs to be a tier like the op said, not all games need to be huge budget blockbusters, games with smaller budgets or less content should be $40-50 while the huge multimillion selling games can stay $60 since people are willing to pay that much.
I have no problem spending $60 on series I know i enjoy or by developers I trust like Naughty Dog or Retro but a game by a developer with a mixed track record or a new ip from an unknown dev is a much riskier investment at $60.
So lets say these mid level devs cut there budgets by 1/3 to 1/2 and sell the game for $10-20 less, they wont need to sell as many copies that way and people will be more willing to spend $40 on an unproven game vs $60.
When the herd loses its way, the shepard must kill the bull that leads them astray.
