costs rise because of the industry, not because of the hardware. if there was no real competition, games would not be so expensive to make. devs and publishers brought it upon themselves and have seen that it doesnt always works.

 Development costs are absolutely effected by hardware.  Any modifications to the fundamentals of an existing architecture can easily cause numerous unforseen complications as well as numerous unforseen benefits.  

If anything competition is what keeps game prices down as low as they are.  Any company with a lock on a market would have no incentive to maintain reasonable prices.  Competitors who are afriad of being percieved as too expensive instill the same fear in their competition and keep things from getting too expensive. 

Good thread Legend11. I agree with your points.

I think the only real drawback to how this generation is playing out, is that we'll all be forced to go multi-platform so we can have our Wii Sports and GTA too. Personally, I'm still hoping for a GTA3 compilation on Wii.

The problem with the PS3 and 360 this gen is not only does the development costs rise dramitically as the bar gets higher and higher but the development time also does - this means that the companies have a lot of overheads before they get any return, taking all of this into consideration is it any wonder why we're beginning to see vast array of FPS as there's so many of them getting huge success, would you take a high budget risk?

This is why Xbox Marketplace / WiiWare is important this gen and even though some aspects of this gen seems to be pushing the gaming companies into a stale position - the DLC outlets are perhaps the most diverse introduction since Cartridges got replaced by CD's.

 yes development costs are affected by hardware, but never, absolutely never has coding ever eclipsed art as themost expensive part of development.   the hardware also doesnt affect as much as you think.  its pretty easy for a dev to make a 360/ps3 game look way better than ps2/wii/xbox game, yet ps2 games are still coming in at 20 million sometimes.  that make sense?  its because it really isnt much about hardware when the game gets made.  hardware allows people to do more, and boy do they do more and spend more money doing it.

 competition is also wrong.  while competition does often keep things down, its really about the publishers.  did the ps2 games outselling 360 games keep prices at 50?  do publishers have a set price scheme for big games?  the answer is yes and competition doesnt change that.  it might make games better, but competition doesnt really keep prices down and as i have shown above it often can increase costs.

@sqrl ... sadly the problem with the pc is it does not have uniform product cycles, also 100% market is a fantasy apple now represents about 10% (largest seller of educational laptops, bigger than dell as of this year) and linux at about 5% while still truly dominent with the windows family, you have people still using 98 in large numbers, xp is about the best platform penetration with the best odds of uniform performance abilities (none of that drm through hardware bull) unfortunately vista and dx10 are the here and now, and will choke the market for awhile again until a majority of new computers reach consumers... also integrated graphics chips must die, they waste more resources than they ever help.

the rise of consoles has much to do with the very uniform hardware specs, making it easier for games to be developed, and allowed for quick hardware price drops.

but as to the topic development cost will continue to rise until there is a market slump. before this slump there will be another rise in game cost, i see games in the states going up to 75 bucks a piece before 2011 first it will be major 3rd party titles then first part will edge up to keep going, budget titles will have the 59 dollar price.
this however may be avoided if one of the many laws being pushed by the video game industry gives them monies of of used game sales, (normally a %) look at florida as an example of what is to come, where used games have waiting periods before they can be sold must be licenced and reported, they are supposed to be implementing a new tax that is paid to a gaming industry body similar in nature to the riaa but going after the likes of gamestop, and their ilk.

 i would agree except for two things.  one is psn/xbla/wiiware.  which devs have very low prices.  these are seen as very valuable to people.  the other is the budget game.  some budget games do very well and so i think it keeps everyone from going up.  i agree that game prices might go up though.

Too many posts with too much text, can someone summarize the first post in 3 sentences for me?

(Without having actually read it, I would blame rising cost of games on rising cost of everything else, known as inflation.)

Here's the gist of the thread.

A: "Costs are increasing due to new hardware that is more expensive to develop on. It's unavoidable."

B: "Coding doesn't cost more. Better looking art costs more. They could keep costs down if they didn't try to force photo-realism when the technology isn't ready yet."

C: "They should make cheaper games and focus on the fun instead of the pixels, like Katamari or Portal (Rubang's favorites)."

It's going back and forth a bit, but that's it really. Now you can add your 2 cents! Good luck!