That is of course true, but it leaves out the important fact that games, while costing more to make, are more a mass product than they were before. Meaning, yes, it's expensive to make a single game, but once your game is developed, churning out more copies of it doesn't cost much more - whereas you can charge full price for every copy you make. I've heard the argument of "games are being turned into money machines because the developers/publishers have to cover higher costs", and don't be fooled, it's not true, it's just a way for companies to try and get more understanding for their soon-to-come switch in business model.
Games are being turned from an ownership model (pay once and own the game) to a service model (pay every time you want to play) because it puts more money into the pockets of shareholders, it's that simple. The days when gaming was a smaller industry governed by the drive to make good games are over. Now it's all about making games that make money. Games are all dumbed down and geared towards pleasing the lowest common denominator, with hopefully a nice big expensive multiplayer aspect they can squeeze for more cash.
I may sound like a cynic on this, but it's a fact. Companies have to make money, or their shareholders grumble, and if a CEO can't turn a big enough profit, they'll replace him with someone who can. Believe me, I wish it wasn't true and game companies kept making games as groundbreaking as Daggerfall or as gripping as Planescape: Torment, but that's simply not what the bulk of today's gamers buy.
edit: also, hi!
