Static, you're arguing these little points and missing the big picture. If a developer wants to make the same game they made for PS2 a few years ago for PS3 today, its a far, far, far riskier proposition. They've got 1/50th of the installed base. They've got less knowledge of teh hardware. Less middleware solutions and engines have been developed. The expensive hardware has sped up the graphical arms race. The audience is becoming more and more conditioned to expecting more and more content in each subsequent game, and expecting a MAJOR jump for "next-gen", especially if they're going to shell out so much money. When a developer comes out and talks about it being too expensive to develop for PS3 or 360 (and lots of devs are doing so), this is what they're talking about. Now, they might say "cost to develop in HD," which I guess the surface observation, and is only partially true. But costs ARE climbing. We can see the rising costs in game prices--both the console makers and game developers need the 20% more per game to keep having the same kind of profits. As for Gears only costing 10 million to make... Well, obviously there's a special situation with the engine there... As well as with the marketing, which was probably way above average... Still, no doubt a hugely profitable game, but a system's best-seller this far into its cycle better be.
"[Our former customers] are unable to find software which they WANT to play."
"The way to solve this problem lies in how to communicate what kind of games [they CAN play]."
Satoru Iwata, Nintendo President. Only slightly paraphrased.
