I understand that Konami could potentially justify a lot of content for a full fledged 2D title, but I don't think Castlevania has the pedigree to justify a good return on investment for a major big-budget 2D title at $50 or more.

About the 3DS cost - remember that selling a game on XBLA/PSN/WiiWare for $15 is not the same as selling a retail game. On a digital title, you get a 70% cut of any revenues that come in, or approximately $10.50 per unit sold, assuming it is self-published (obviously Konami is in a position for such a thing). Comparatively, a 3DS title will require a lot of fees to go out - Nintendo's royalty fee, shipping & distribution of the title, retailer markup, and cost of the product itself - the cartridge. By the time you take those fees out of the equasion, you may not be making any more money on a 3DS title than an XBLA/PSN game. That is why we see so many titles go the way of digital distribution on PC - because you make more money for less work. Not to mention the fact that you have a much longer tail of sales on a virtually infinite market than you do at retail.

It's not about devaluing the product, its about offering a good value proposition...Trials HD and Castle Crashers would of never reached their epic sales levels at retail if they would of even been published. That is why XBLA/PSN/WiiWare can be great platforms - ideas and concepts can be published that would be poison at retail.

I agree that Sonic 4 wasn't the best in example, but was a very good idea in theory. Its unfortunate that they didn't get the physics right, and the episodes are likely to sell a fraction of Sonic 4, but having it as a digital title likely meant a much lower required threshold of units sold to break even. Its hard, also, to compare sales on a 1st episode versus preceived sales on a multi-plat boxed title. Could if of sold better on retail? Probably. Would it justify development on multi-plat systems for a full retail release and major marketing push? Unlikely.

I have SoTN/HoD sales because I'm in a position to know them     SoTN sold about 450k on XBLA and counting, and I estimate about 250-300k on PSN. HoD has done rather poorly at 175k on XBLA, but I think that is due to the stylistic choices in the game. Personally, I think HoD was rather offputting and could have sold twice as much by now if it was more Metroidvania-like SoTN.

Well, the brand likely didn't warrant the investment sunk into Lords of Shadow, but that happened anyway.  "Big budget" is relative, but I think a 2.5D retail Metroidvania on Wii and/or 3DS could bring in a similar return as that title, for substantially less cost.

Yes, digital services shave off various manufacturing and logistics costs, but the royalty take itself is actually (proportionately) higher than retail.  Microsoft scales royalties for exclusivity (and they "charge" more for banner promotion) while Sony forces the publisher to pay any server costs for downloads themselves... fees can actually add up on both sides of the fence pretty quick. The "tail" is relative too... despite having no physical inventory, there's still "shelving" issues with digital services, and products not at the forefront tend to dry up (and in some cases get delisted).  DD is perfect in theory, but the reality of each of the services is pretty far from the ideal one would expect.

Also, for 3DS you're probably looking at a $35-40 US pricetag (1-2GB cards remember), and higher in other markets (€35-40, ï¿¥4800-5800)... digital prices don't seem to scale as high for Japan and Europe, they're pretty much consistent across regions.  3DS prices likely won't be far down from Wii to be honest, probably around what PSP used to be before the platform bottomed out in western markets.

Charging $15 online for what would normally be a $30-50 retail product is exactly "devaluing" and it conditions the consumer to expect more for less.  We're not talking about new IPs in genres that haven't been popular since the 1980s, Castle Crashers and Trails HD are odd comparisons at best.   With SOTN you could get away with that because it was an already complete game, with HOD we got 100% recycled assets and a non-traditional, truncated "multiplayer" design... considering all that, I'm not so convinced the numbers actually support a full fledged CV game on XBLA/PSN, or I think it'd have already happened.  Meanwhile, DS has warranted 3 full titles so far, all to decent success... we can guess at numbers, but precedent more sort of supports my side here.

And I think you're underselling what a retail "Sonic the Hedgehog 4" could actually accomplish in terms of sales.  I know it's cliche to bring NSMBWii but... well, look at NSMBWii.  It hits all the right cords; accessibility, familiarity, nostalgia, and it's been a HUGE hit.  DKCR looks to follow in it's footsteps, and I've no doubt Sonic 4 if handled right (which I'll admit, is a huge caveat when talking about Sonic Team) could've absolutely been in the same boat.  As is Sega's going to end up charging the same probably (3-4 Episodes = $45-60) but they're limiting their absolute base in the process (WW/XBLA/PSN <<<< Wii/360/PS3 at retail) and I'd bet their absolute sales as well.