Hold on, Legend, I knew those numbers sounded odd. Look at this article:

http://www.gamespot.com/news/6133848.html

It states that PS2/Xbox/GC games averaged less than 1 million in developmental costs, not 8. Relevant text:

The average price of the 13 Xbox games included in the survey was 202 million yen ($1.8 million), with PlayStation 2 and GameCube development costs trailing behind at 96 million yen ($877,634) and 90 million yen ($822,857), respectively.

This is much, much closer to what I'd read before -- the total cost for a game could reach 8 million last generation, but rarely (if ever) the developmental costs alone. I'm pretty sure it's your article is mistaken.

Not only is this very, VERY true, but I'll personally take more notice of exclusives than cross-platform games because it has been my experience that exclusives tend to be far better games than cross-platform ports.

When the development budget is spread across multiple consoles, quality typically suffers. There are some exceptions to this rule, but when it comes time to choose between DQ: Swords or Godfather, I'd pick DQ: Swords because I know the team behind it created it with the Wii in mind.

That said, it's rare that games will "pick up the slack" when ported, so to speak. Fans of a console tend to gravitate toward its exclusives and this can and will result in more sales, especially if marketed properly. 

Well the article you linked to doesn't agree with the one in this thread either...

I look at games on their own merits rather than if they're exclusive or not. I've seen exclusive games on the 360 that are terrible (Vampire Rain) while seeing cross-platform games that are very good (Rainbow Six: Vegas). Exclusivity holds out the promise of a game being better because they're designed specifically with a certain system strengths and weaknesses in mind but there's no real guarantee of that actually happening.

I agree, it simply is intended to put your article into question. Here are more articles that have wildly different claims:

http://www.gameplanet.co.nz/mag.dyn/News/8340.html

Current development budgets for an A-list title average around $5 million

This is completely valid from a player's standpoint, and I really really wish more people kept this in mind when arguing n these boards -- some seem to think that the whole point is that their console wins and has all the exclusives and everybody else loses and they're ugly, when the point should be, I think, to have fun with games.

This issue is different from a hardware developer perspective, though. If all the major 360/PS3/PC exclusives end up going multi platform, it means that each console has less value to distinguish itself from its competitors. The major differentiating factors become marketing and price point, and obviously Microsoft and Sony could end up fighting a horrible, bloody battle over the same demographic. They will market constantly, even at the cost of hundreds of millions; they will cut the price of the system repeatedly, even at the cost of billions.

As I said earlier, this ocean is very, very red. Good for current gamers, but brutal for system makers.

Another point - from the data we have seen recently (polls, most wanted, etc) - platform exclusive titles get more attention from gamers, more demand - and generally sell a LOT higher than cross-platform titles.

Don't go basing figures on the sales of big brand titles (RE, MGS, FF, etc..). They are not the norm - they are a special case. This report/figures relate especially to smaller publishers, or large publishers with smaller brands - trying to work out the best strategy to turn a profit.

Would gamers be as excited about say, Uncharted if it was a cross-platform title? (also means Sony wouldn't be pushing it so hard).

Would Gears of War have sold as well as a PS3/360/PC release? (its also hard to kno, as the conten/quality of the title may be different anyway).

If Assassins Creed was 360 exclusive, would there be more hype around it? 

Because the engines that were licensced for last gen games didnt just dissapear mate. I see people saying this alot. Trying to lower the gap in development between PS360 and Wii by tossing in licensed engines. But the truth of the matter is there were engines being used on Xbox PS2 and GC also guys, and they STILL exist for use on the Wii, and they are going to come cheaper. The gap in development is real, it exist, and always will. Just get over it. The only side effect I think we will see from the massive difference in budgets is what we have seen so far. 3 or 4 Wii games per 1 HD game. Mass majority of new IP's I expect to see come to the console where the risk of money troubles if your game BOMBS is least apparant. 

Well, IF all developers team decide to port all their games to both Xbox360 and PS3 and IF Xbox360 and PS3 sales are able to jointly catch up to Wii sales someday, and IF developers have people to work on both PS3 and Xbox360 ports (I was thinking some small Japenese developers might not have people for Xbox360), then from a third party point of view they have an equal chance of a successful game as if they published it on the Wii. It seems it would be a good idea to choose Wii anyway.
Essentially all this talk about porting is actually wrong in my view, since most games will also be ported to the Wii anyway. Why should they not port it to Wii if they would only need 30-40k to break even?
Yeah if Microsoft and Sony team up they might be able to stop Wii now, but I guess for new IPs they will not be a first target. Maybe they will have the same established IPs.