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this graph made by Factor 5 is interesting


On the other hand Factor5 possibly just sucked. Throwing more developers at a project that is already late seldom solves any problems but makes them bigger. LittleBigPlanet developers said that the emphasis on huge teams is overdone.

In the end nobody is forced to make hugely expensive games. They do not need motion capturing, hugely detailed textures, great shaders, if you want to make simple games you can make this even more easily than on lower powered consoles because you don't have to optimize. The only problem is: these games do not sell because other developers have all these things.

Another big factor IMO is that the first game on the new gen will always create a big overhead. You have to train developers, create tools, make every artwork and shader from scratch because you cannot reuse anything. This will be much less painful with the second (and depending on lifecycle length) third game of each developer.