Considering that FFVII on PS1 costed whopping 30 million dollars to make surely there are some games on DS that costed at least over million to make. DQIX is probably the most expensive. Of course most DS titles are cheap to make but like with every system there are also games that cost a lot of money.

Marvelous Entertainment may be struggling with the Wii, DS and PSP (they recently broke into the HD market as well with Deadly Premonition and No More Heroes: Heroes Paradise. Very doubtful those were profitable). But going over to 3DS development is only going to take them to bankruptcy a lot faster.

The shareholders at Marvelous should just sell off their company to be honest. If you can't hack it on the DS and PSP, what other options you have? There needs to be a whole lot of consolidation in Japan (and in the west for that matter. Struggling Indie devs like Ninja Theory and Realtime Worlds are destined for bankruptcy). You have all these little companies releasing gazillions of niche Japanese games. Fans of these games can't dream of playing them all. So many are going to be overlooked and sell poorly.

That's a big exception, although considering it sold half a million, it made a lot more profit than many other HD system games did.

This is very true, development costs always escalate with new technology, it'd be interesting to see the leap of GBA dev costs to DS or even PSP since the leap in technology is closer to GBA to PSP than GBA to DS.

It's normal that at the beginning of a generation, the costs are way higher than the precedent generation. You need to develop new tools, engines, the studios are not familiarized with the hardware... In two or three years, the production cost will go down, and if £375,000 to £1.1 million is a lot of money, then compare this with the costs of the HD consoles.

Not necesarrily. As time goes on it becomes cheaper and cheaper to develop games for similar hardware as methods are refined. FF7 cost 30 million in the 90s to make, probably a fraction of that now.

Thats what one of their titles cost to make. Im sure someone like Capcom could easily spend $5M on a Resident Evil or Konami the same for a Metal Gear Solid title.

I think it is pretty obvious it will be more expensive, I just hope it doesnt turn devs off.

That shuttering sound you hear is small developer closing up left and right.  Go Game Industry!