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[R]egarding the whole risk-versus-reward aspect of both remaking/remastering old games or developing entirely new games, it's obviously a result of higher development costs. Had we simply been fine with 2D sprite-based games for the past 20 years, I imagine the costs of development would have been much lower. For example, if FFVII had graphics more in tune with FFVI, just with higher-res and more detailed sprites, with no 3D models or CGI cinematics, it wouldn't have cost what it did. Instead of being the most expensive game ever made at the time ($45 million in 1997 dollars), it would have likely had a more manageable budget of perhaps no greater than $5 million, which was at the upper end of the norm for fifth-gen games.
But that wouldn't have been good enough for gamers. We always want more out of our gaming experiences. We want better graphics, bigger worlds, and longer more epic-scale experiences. Some genres would have been impossible to make using 2D sprite-based graphics. Graphical technology and computer power had to progress for gameplay to progress. But that progress came at a price. Nowadays the average cost of a new AAA game is on the order of $20-40 million, so what was an extreme outlier in 1997 is now increasingly the norm.
And while development costs have increased several orders of magnitude over the past 30 years, retail costs have declined. While I can't speak for other countries, in the U.S. inflation-adjusted retail prices for games peaked in the early 90s, with some games costing well in excess of $100 in today's dollars. This has been offset somewhat by the fact that gaming has become more mainstream over the past 30 years with software sales having grown considerably (SMB3 was the first and for a few years the only console game not originally bundled with a system to sell over 10 million copies for years, and SM64 is the only other one from the 20th century to pass that mark; now we have several 10+ million sellers every year). However, you can't fully offset three orders of magnitude with only one, because if it did then we wouldn't hear of games selling several million copies being called "failures" by their publisher. A million copies was once a huge milestone, but not anymore. Gamers are also increasingly unwilling to tolerate a retail price of more than $60 (a price point first introduced when the Xbox 360 debuted nearly a decade ago), which is why DLC is becoming more and more prevalent; by providing lower-cost, higher-margin optional add-ons, you can get at least some gamers to spend closer to what they were spending back in the 16-bit era. If gamers want to continue enjoying the latest cutting edge AAA gaming experiences without paying more than $60 at retail, well, remasters, remakes, and even DLC are the additional price we're going to have to pay to make up for increasing development costs.
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