I don't know if I could say console game prices have become unreasonable as they are still selling fairly well. I definately believe that they are starting to trend up and will soon be out of hand.
My take on the cost of games is this: Sony sells their PS3 SDKs for a VERY hefty sum, something like $10,000+ (which was just recently lowered to this price). I say that is hefty because small devs don't always have the resources to invest that much money into something. Add the fact that the PS3 is a pain in the butt to program for, is HD which requires loads of artists for HD textures, and has high expectations, and you have HIGH dev costs. Since the dev costs are so high the publisher who buys the game from the Dev has to pay more money this gen, on the HD consoles at least.
The market model for Developers is varied but for a big title the Dev will get paid at least a portion up-front. They will get the rest of the money after they complete the game and hand it over to be published. Other times they will get paid only after they have created the full game, or have a working model they advertise their game with in hopes to sell it to a publisher. This type of model is VERY high risk for a developer, especially one that doesn't have any connections or a long development history. Yet other times the Dev will make a game and publish it and then get only the royalties from those sold.
The problem lies in risk, they cannot risk a game not selling as well as needed with a lower price tag, therefore not recouping all of the invested monies. The publisher therefore opts to increase the price to the retailer and the retailer passes it on to us, the consumers.
Now if the game sells as expected, they make enough money to do it again. If it is a great game and sales explode, they rake in the cash. BUT if it flops, well it flops; and either the retailer and/or the publisher takes the hit. The publisher doesn't want to take the risk that the game won't hit enough sales at a lower cost to make money or just break even. They want to make sure they get some money back so they increase the prices and voila~! We see the prices of games @ $60+.
It is all a question of volume; if they could ensure that they would sell 1 million copies for every game, then the publishers could sell the games to the retailers at a lower cost and they in turn could lower the price tag for our beloved(?) games. However I don't know if the retailers or the publishers will lower the prices this gen, since the model has already been set.
