I don't see why high development costs are a bad thing.

High development costs = more money spent in the industry = more people getting their hands on that money in the industry and feeding their families.

Lets do some math...
Invisible walls on gametrailers confirmed this week that average ps360 game is sold to Gamestop, Walmart...etc...for 48 dollars!
And the console licensing fee for consoles is 5-10 dollars depending on the game/console.
So that leaves 38 DOLLARS! per game that goes between the publisher and developer.

According to this math, an average game that sells 500,000 copies just made 19 million dollars. I sure would hope they would invest that money back in to gaming and spend it on the people in the industry making better games...rather than spend it on Ferrari's.

Stick with this gen forever.

In reality, what happens is that high costs result in struggling publishers (even the big ones are struggling in this gen, like EA), which results in layoffs. A bankrupt company doesn't feed anyone.

That means that the company was expanding too fast, spending resources too quicky and employed more people that they could. Its unfortunate but most American companies have always had the mentality of..."can't remain neutral on the moving train".

Also, while this is pure speculation...I think that layoffs in the videogame industry are a lot less crippling to the people getting laid off...compared to, the auto industry lets say. People making games can usually find work in flash design, website development, animation studios...etc.

It will not go down, look at movie budgets, also look at the fact that $10 in 1995 is worth more then $10 in 2009, so really the value of money is going down as well.

With each new generation development costs have always risen... issue is if next gen is a leap like this gen... it could mean the end of many 3rd party companies I'm not talking about the small guys either some huge names could possibly go under.

Too bad that math is increadibly faulty and doesn't take into consideration packaging, shipping, advertising or a range of other costs nor does it account for the investment that went into making the game in the first place.  Only one in five games that goes to market makes a profit, and only one in 25 games that goes into production makes a profit.  That means that even IF your math was even remotely correct most publishers and developers would be bleeding money from all of the games that don't meet those sales numbers or don't get completed.

http://www.shacknews.com/onearticle.x/56081

Ditto.

"We will  stand and fight!"

It's true that some companies hire too many people. But if development costs were lower, companies could make more games with the same number of people, and decrease development risk. It's quite possible that low development costs would make companies profitable even without laying anyone off.

First of all, your whole argument is this article which says that some "guy" said that 20% of started games get made and 20% of finished games make money...so 4%. Its great that you can summerize and attention grabbing article that some no-name site posted to get more online advertising.

Secondly, who says that I didn't consider the finished product. I am saying that 19 million dollars is needed to develop a game, ship it out, package it...if a game is estimated to sell 500K. That is highly doable.

Sure, some games will lose money...but consider that gears 1 cost 10 million dollars to make. You can gave great, acclaimed games that have moderate to high budgets and still be very successful. For example...even games like FEAR 2 and condemned should make money selling less than a million units across all platforms as they were made with in house engines and should sell enough to warrant production cost. Not every game made is made for more than 50 million dollars...