The argument is ludicrous.
Production costs are rising, but more capable hardware and more advanced dev tools are making game creation easier and more accessible.
The ever increasing number of indie games and game studios are showing than more than ever it is possible to create great games, at lower prices, with reasonable budgets and make profit.
The only reason why AAA publishers want to increase budgets is because they believe they will make more profit that way. Publishers are profit oriented companies, they invest money to make more money in return (it's as simple as that). If company doesn't think a business venture is sustainable it would invest less money in it, not more.

So, there is no need for a price increase. Publishers are just taking a calculated risk since they believe the negative effect in terms of reduced sales volume is lower than the positive effect of higher margins.

In other words, they are taking a bet on your subservience as customers and they believe it will pay off.

edit: btw, that's the main reason why I have put my PS5 purchase on hold at the moment, even though I had the money allocated for it already.

How is that a perfect example against games that do 5M day one?

Well in the UK it's also partially due to the British Pound losing quite a bit of value. And the looming no-deal doesn't help matters either.

Still, I agree that going to 70£ is way too high an increase. I was personally expecting 60£, and that's with the price hike for this gen included. That would have been a 10$/€ and 15£ increase in price for this gen and much more understandable. But 70£? GTFO!

Edit: I forgot to mention my position about the price hike. So here it is:

If they would remove all those predatory microtransactions, lootboxes, expansive dlc (as in, having dozens and dozens of DLC for one game) time-limited in-game stuff (like most season passes) and other skinner boxes, then I could agree on the price increase. But with all their other monetisation venues in place, the prices should actually come down, not go up.

Long story short, they can go royally fuck themselves sideways from behind with their prices. Even more reason only to buy games at a sale now...

I find the pricing thing silly.

Because the games are priced at $70 or whatever, doesn't mean anyone has a gun to your head to pay that price. Just buy the games when it gets to a price you are comfortable paying. Let those that want to pay $70 pay that.

The last time I bought a full-price game was with GOW. Every other game, I wait until it hits $40 at most.

The rate in which the RRP on some games has increased is ridiculous.

£50 -55 is acceptable. Most of my day 1 purchases last gen were £40/£45. with some titles being £38.

I will not being paying £70 on a game, just how I have not paid £60 for these silly digital deluxe versions last gen which had barely any notable content.

£40 with £20 season pass is my ideal budget. I think the days of me buying games day 1 are soon over anyway. MK11U was £38 on launch day and I can imagine that eing the last.

I already find it silly how we've got a game like Remake 3 that came out in April, and Capcom are still charging £50 for it. The game released 7 months ago and hasn't really seen a price decrease. I've actually noticed that with some AAA games within the past 3-4 years as well, and it irks me hard.

$70 let alone $60 for a game is too much. Costs are going up, but that is a publisher decision that shouldn't pass what they wanted to spend on development to the consumer. Gaming is bigger than ever, so prices staying the same is balanced out by this. Also considering digital sales are on a huge rise means more revenue for the publishers since there is no cost of manufacturing, retailer cut, shipping, etc. On top of that microtransactions and DLC in games are costing more in a way.
So why are people defending Sony, Activision, and other companies when there is literally no reason for a price increase on base games? Especially Demon's Souls a game that is a 1:1 remake of a PS3 game. Ratchet and Clank Reboot, Shadow of Colossus, Crash N Sane Trilogy, and Spyro Reignited Trilogy all came out at $40.

Don't see it? Let's see if this url helps you.

https://insights.dice.com/2016/01/08/minecraft-and-the-power-of-word-of-mouth/

Or even this VGC post by @B6a6es

https://gamrconnect.vgchartz.com/post.php?id=9251338

Free market. The publishers think their product is worth more because they put more resources, if market agree and pays for it the 70 will stay, if first week/month sales start to be a lot lower than when it was 60 it may drop. But considering human behavior in general I don't think they will lose to many sales to stop charging 70. It was the same with MTX and some predatory DLCs.

Spot cases doesn't prove anything. Again the biggest brands with high quality products still do heavy marketing.

I'll just gonna leave this here:

https://www.youtube.com/watch?v=N7kaK2-725w