i just turned 20 today, and i dont think that will happen (unless they WANT to fail), seriously i doubt even hardcore fans would want to shell out that amount for just one game.

Ok, different example. I dont know wich country you live in, but if a market that used to be regulated becomes regulated (popular example here in europe is gas prices and dentist prices) the parts taking part all increase the prices straight away. Such an open market is suppose to exist so companies compete for price and the consumer wins , but what in reality happens is they will all increase their prices so they increase their margins and if everyone raises the price the consumer gets no choice but to pay more for it. This is not arranged aswell, they all profit from it so its obvious to them. Who never comes out winning: the consumer. Seriously, thats how the world works, everyone only thinks of themselves and the easist way to profit (except family and loved ones). You will see that with time. :)

If this happens, chances are that Nintendo will get almost nothing from third party publishers.

I see where your coming from, but the examples kind of off, it only works if their giving a product or service where the demand wont fluctuate due to price, people are always going to need petrol/oil, if the price is higher then their just going to have to suck it up and pay more for it, same goes with the dentist example, video games however arent an essential need, its a want, its demand fluctuates much more depending on price, I live in england, so most new games are released here for £40, now a popular game here is fifa 13, lets say they raised the price to 60-70 pounds just for fifa13, a few diehard fans would have still bought it, others would have been put off until the price dropped. 

Sonic 3 might have sold well at 80 euro's, im not sure, it was before my time so i cant really comment on that, my first console was the SNES and my dad used to buy the games from asia (he travelled there alot) really cheap. 

Then the PS4/720 scene will be abandoned for PC and tablet purchases. The Wii U and the handheld duo wouldn't be considered for a second.

In all seriousness, I can imagine everybody involved reaping the immediate rewards, but a crash would come a couple of years down the line. And it would hurt. A lot. We're talking about seeing either Sony or Microsoft have to quit the industry if they get off to a bad start and/or either Ubiosfot, EA, or Activision Blizzard going the way of THQ.

And before you call me ridiculous, bear in mind how small changes in the industry can kill big names. THQ was one of the world's top 10 publishers a few years ago.

There is a supreme irony that basically nobody appreciates in this situation aside from myself. The used game market is not the enemy of the new game market. It actually reinforces the new game market. Used game sales actually fund the purchases of new games. Removing the model from the market will actually decrease the amount of real money going into the industry.

The reason that used game stores are thriving is, because the low income market that games. Cannot afford to bare the burden of just buying new games. When they buy used games. The money they spend is going into the hands of consumers that will buy new games. If they cannot recoup their out of pocket costs by selling games. It stands to reason that they will buy fewer games, or buy them at steep discounts.

If the industry wants to optimize first time sales, and address losses due to middlemen profiteering. Then what they need to do is compete with the middlemen. Through aggressive pricing of their own software. Once it has become sufficiently dated. The retail price should be reduced by a certain amount every few months. To keep it competitive with the costs of used games. If they just got it in their heads to price according to demand and value. Some of these companies would be making good money especially on the digital side of the equation.

100% correct.

I work in the gaming retail industry and its refreshing to see someone who actually understands how the industry works.

Depends on how they do it. In the short run it could be very damaging to the console maker. In the long run they may squeeze a profit out of it if they can weather the storm and a chunk of their fanbase moving to other platforms. Because customer like to think how important they are to the company as an individual that isn't the case. There is always a way to create a new fanbase because as the old adage goes there is a sucker born every minute. And one things stabilize it will become a norm for the industry. The software industry has almost always been built on the precept of not allowing ownership of the item, and this isn't going to change.

As for prices it will not go down. If anything we will see software prices go up. Since publishers will cite the rising costs of developing these "hyper-realistic" experiences. And the console manufactures will bow or risk loosing titles to their rivals or to the PC/mobile market.

Yes and most of the customers, at least the ones how follow the market understand this. But as I pointed out in my last post, console manufactures have to face on of two situations 1) Loose titles because publishers think they are loosing money and will not support a console unless there are plans put into place to protect their stake in the market. This is one of the biggest reasons in the push for digital you can not sell what you physically don't have, and they are placating the retail by allowing them to sell download codes. or 2) invoke the wraith of their customer base. It will more than likely be option 2, since most in business knows that while most may make a stink about adverse moves in the market. Few actually move since it takes them out of their confort zone.

They will not loose reatail if they block used games, they will put into place incentive programs and offer them a cut of their digital platform's profits. Which the way things are going is going exactly the way the customers should want it to go.

EDIT: Oopps went off on a tangent and forgot 2.

hmm, not sure how it will affect sales in other regions, but in NA, I think the 720 and PS4's sales will be hit hard.