"because people are stupid and will always believe us when we plead poverty."

I am not buying into these companies need to sell games at a higher price to make up the cost of these games. Game development has gone up, so have game sales and all the in-game shops and expansions etc.
If Xbox can put thier big hitters on a service platform than so can any one else.

I'll ask some simple questions.

1. How much do you think it would cost to have say... Cyberpunk on GP day 1?
2. How many first-party XB games have sold over 8M copies this gen?
3. If you could sell a first-party game or two at $60/$70, and sell 7-10M copies of them a year. Do you think you would even consider a service like Gamepass?

You are right, anyone else can do what MS is doing ith game pass, they just don't need to do it. And doing what they are doing now is better for everyone involved. Especially for the gamers (as crazy as that may sound).

So how much do you spend on games annually to keep the gaming industry healthy?

That must be indeed, sporadically they will get 3rd party titles at release and the other 3rd party titles will consist of older titles or parts of the games like with EA plays.

That’s why they release games on Steam and Windows Store day 1, along with regular console version purchases. It all part of the ecosystem. 

I am going to write an article with a video attached to explain why.

What companies like MS and Sony spend on securing games is completely up to them, that does not concern the customer, however raising game prices when games are making more money than ever before is the insane part.

But that's what this is all about. You can't just say its not the consumer's concern. The platform holders certainly do not make choices without considering what the consumer wants. What you are saying shows a gross lack of understanding of how these things work.

You highlighted (or dismissed) third party game securing and prices of games. I will address these.

1. How much they pay or their ability to secure third party games is the single most important thing to a service like GP thriving. There is just no way around this. The costs associated with vs money left on the table this is what makes such a service sustainable or not, and is what dictates the very nature of the games you even see on such service. This is, not something you can just gloss over as its the single biggest advantage or disadvantage the service has.     
   
   The cost to acquire AAA third party games to launch on day 1 would be astronomical. For the simple reason that doing so will literally kill any potential sales of that game everywhere else or on any other platform. Who in their right mind would pay $50 -$70 for a game that they can play pretty much for free if they just have a $10 subscription to a service? $70 vs $10. How is this not obvious to you?
   
   
2. The way you are looking at prices going up is wrong. The simple fact of the matter is that cost of making games is always going up. The last price hike was exactly 2 generations ago (PS2/XB > PS360 gen) when game prices went up from $50 to $60. But how long it has been isn't even all that is important. What's important is that the minimum cost of making a AA or AAA game has gone up. Back with the PS1 and even the PS2, all your game had to do was sell 1M or 2M copies and you were good. You are a success. That's it. Going "platinum" was a big deal then. But now? if your game doesn't sell at least 1.5M you wouldn't even break even in most cases. Now, small studios that may only get like 500k to 1M sales for their game would seize to exist if they aren't getting more from each game sold.
   
   I hope that gives you a better understanding of this.

And that's just nonsense really (not what you are saying, but the relevance of this "ecosystem"). Come on, be realistic here. Or at the very least be honest. If you own PC/Xbox, and any game is made available on Steam/Windows store the same day and date that is made available on GP. Would you buy it? Does it even make sense that you should? Why spend $50 - $70 to play a game when you can spend $10? 

Here's the kicker, if people even as much as know that in 3 months that same game would be available on GP, they would wait. There is NO ecosystem with GP, all these other systems only exist along with it now because GP hasn't fully come into its own. But if or when that service does, there would be no reason for anyone releasing on the PC or XB to put their game on any store if that game is also going to be available day and date on GP.

I would have thought this was obvious.

That's far from the truth

programmers:
https://www.glassdoor.ca/Salaries/us-game-developer-salary-SRCH_IL.0,2_IN1_KO3,17.htm  50,923$ average
https://www.gameindustrycareerguide.com/video-game-programmer-salary/  Only senior devs are 120k+
https://www.salary.com/research/salary/posting/video-game-programmer-salary  65k Median

artist (which constitue most task force)
https://www.payscale.com/research/US/Job=Video_Game_Artist/Salary 57,264 average 71K Max
https://www.glassdoor.ca/Salaries/gaming-artist-salary-SRCH_KO0,13.htm?countryRedirect=true 58k average
https://www.gameindustrycareerguide.com/video-game-artist-salary/ from 35k to 90k for senior

Tester :
https://www.gameindustrycareerguide.com/video-game-tester-salary/ "start around USD $18,000 and top out around $55,000"

And that's all for US, game developed Salary in Canada and many other countries are way lower than this.

Average salaries at eidos Montreal : https://www.payscale.com/research/CA/Employer=Eidos_Incorporated/Salary  CAD 73K or  USD 55k
Average salaries at Ubisoft Montreal : https://www.payscale.com/research/CA/Employer=Ubisoft_Entertainment_Inc./Salary CAD 67K or USD 50K

I think your 130k figure is more accurate when it already account for other expense related to the position (employer's payroll obligation, insurance, equipment, software license, electricity etc...) 

I know marketing cost are substantial often overtaking development cost (sometime even many times over) but I was speaking dev cost only and so was Jim Ryan in the citation from the op.

"Have any idea how much an ad spot in the Superbowl cost? $5.6M... for 30 seconds." That's not the cost of creating the ads, that's is the fees for a 30s time frame for diffusing the ads during the superbowl. It does not relate to game development cost in any way shape or form. 

if we look a things differently, most AAA does not sell enough copies to justify a 100m+ budget let alone when factroring in martketing cost.
But I guess it all boils down to personal opinion on what you consider AAA. What budget do you think is enough to be considerd AAA. Is 30M enough? (I certainly think so in most case). Is 40M enough (I think I'll have a hard time telling devs there games is not AAA because the budget was only 40M)? Is 50M enough?