I think for some games yes, titles which work within the current current standards of assets but with lower compression and less optimisation, sure. for games which wish to push the boundaries and not just look like high end PC versions of 2011 games I think budgets will increase.

-Most developers for gen one of games will fit into the first category
-Only a few select will fit into the second scenario (massive devs: dice, square enix, capcom, 1st parties)

I don´t think so, since the inception of the videogame industry, game budgets went only in one direction up, up and up. I agree with the point that new engines will (probably) streamline the content creating process, but if you want to increase the details (on a character, in the environment etc.)you still need more time to do so... there is a lot of wishful thinking involved ...
...and even the modest and positive estimates made by Guerilla Games and Epic suggested that game budgets would "only" increase by 20%, which is absolutely laughable, 130 people on one game are already far too many (imo)

Isn't it obvious? PS4 and NextBox will rely on Visual Studio, so yes, it will make everything easier for devs as they don't have to switch between dev-environments anymore.
This is like saying "1 + 1 = 2".

Im sure for smaller devs this will be true, but for inefficient devs and bigger devs they will spend more cause they will feel the need to spend more as it is next gen lol.

Higher fidelity = more work.

You are half right... It would take less time to make the same games like we had this gen but because we are expecting bigger/better execution of games they will be not cheaper.

Not if they hire 100 artists who fill the game with useless trash on every square meter, like they did with the new Tomb Raider. And then the publisher whines that 3 million sales is not enough.

price of development for pc ps4 720 titles is considerably lower than development costs for pc 360 ps3 titles, low enough that the jump in graphical fidelity and texture quality, mesh and shader detail soesnt claw back the costs, a game that cost 5m to make for pc 360 ps3 costs in contrast 800,000 less and takes 4 to 7 months less for pc ps4 720, a single engine works on all 3 platforms with only minor base specific tweaks and texture, mesh and shader detail you see in games of today were originally much higher to begin with then 'toned down' till they suited the engine for a best performance to quality equilibrium, don't kid yourself into thinking developers have a massive task in making assets to suit the new hardware specifications because that isnt the case, most benefits are simply options toggled on and off in current engines because specific platforms couldnt handle them, as a result of near unification of the three platforms, despite their minor differences, development time is reduced and development cost is reduced to a point where hiring additional staff to get the game completed quicker results in little to no additional project costs.

but hey, only worked in the industry a decade, what would i know.

Well this makes little sense.

no, i wouldn't like to have the same costs and release them faster because people won't buy more games per year as they already do.  the sales of every single game would decrease on average. i would rather like to release the same amount of games as i already do but have lower development costs per game. sure, same costs and releasing games faster would be better as this gen but lower costs per game and same sales numbers sounds better in my opinion.