I had been doing some thinking lately about how the price of video games has remained relatively unchanged over the last couple of decades. 
Here's a great article about some of that: 

 http://seanmalstrom.wordpress.com/2010/05/24/email-why-hasnt-games-kept-up-with-inflation/
 
And it's gotten me thinking a lot about how the average NES game cost $50 in 1985. With inflation to todays prices that'd be over $100!! Yet had the same time video game budgets and production times have skyrocketed, many AAA games costing millions of dollars to produce, and years of production. So how is this possible? Massive expenses, and decreased unit prices?? Yet the gaming industry is more successful than ever?? 
 
I think one answer might be: Demand. The gaming industry has boomed. It's audience has increased massively, originally just a thing for young kids, now small kids, teens, adults, parents, and even grandparents are all into video games. So there are a lot more American's buying video games. And of those Americans buying games, I think the average gamer is buying a lot more games per year than they used to be.  And the sales.....seems like half the time as soon as a game has been out for a year, or a sequel is released, the original hits the $20 bargain bin. So company's make their money, and then through the game at the bargain customers and see what extra gravy they can get.
 
But I think there are costs, and the shift for AAA games to go from $50 to $60 is a telling one. And there is another way developers combat cost: DLC. Many gamers perceive DLC as the developer leaving out a part of the game, and then forcing the gamer to buy the full game in pieces. I think sometimes there's a good argument for this, but often not so much. And here's the thing - even if it is true 100% of the time, would you rather buy a $60 and then spend another say $30 on DLC content over time....or have to pay $100 for your full game by 1985 prices? At least with the DLC option, you have the CHOICE of wanting to invest more in the game. IF the game is crap, then you don't buy the DLC.
 
Which brings me to the next thing. Downloadable games. They are the future. The entire PC game market is basically downloadable games, and MMOs/Blizzard. But this future is something retailers will fight tooth and nail. Many will point to the PSP Go as evidence that gamers demand hard media. I think it does not. The raging success of Steam and iPhone games are proof of that. Sony just had horrific support/investment in their downloadable games library, and non-support for people with existing hard media libraries. They sabotaged their own platform. Unfortunately there is a "Catch 22" where the major consoles don't want to invest in downloadable games until there is established proof of consumer demand, but there will be no demand until a massive downloadable game library is established.  A good analogy is the electric car. There's a huge demand, but no support. Virtually no electric cars on the market, and car makers claim there is no demand, because people aren't buying electric cars - but they're not buying them because there are hardly any on the market. (And no support - not really any recharging stations to speak of)
 
But when you look at the overhead saved by going straight to download, no retailer, no media costs, no shipping costs, etc etc. It decreases the cost to produce the game, which mean developers can put that money into development, instead of overhead. Retailers will HATE this, they will be taken out of the loop. I think to offset this, there will need to be a transitional time where when you need to have both a disc and a download version released at the same time. And you are seeing this start to happen like with PSN getting some AAA downloadable titles like Mass Effect 2. The thing is with Sony, is they seem to want to charge people a premium to be able to download games, charging them full retail, while retail games get all sorts of sales, effectively discouraging consumers from buying the downloadable version. But I'll go ahead and say that the next coming generation consoles will not have disc drives. Or maybe, it will come in two versions: disc drive and no disc drive, with a $75 price difference and let consumers decide.
 
However I think the key in the mean time will be to have every disc based game available for download on the game library, and allow for a straight trade to let people trade in disc games for download codes. This costs the console developer nothing, and still keeps the retailer in the loop.