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I think costs depends on the game.

For example, GTA IV & Madden could probably muscle its way onto a retailer shelf at wholesale prices of $50-$55 easily. Those games generate massive amounts of foot traffic and everyone knows it. While for lesser well know games they might have to go with $40-$45.

In addition, high priced developers are definitely given royalties ... RockStar, Maxis, Blizzard, Valve, Harmonix etc. Or how else r they going to be kept happy and keep making those games. For lesser well known developers, I am guessing they probably get royalties but only if they are independent and only after X # of games sold.

Here is probably a good article that breaks down the costs of Gears of War for the XBox 360.

http://www.forbes.com/technology/2006/12/19/ps3-xbox360-costs-tech-cx_rr_game06_1219expensivegames.html

On a side note, development is more or less a fixed costs, so that big chunk should be decreasing as more units are sold.