This is something I've been thinking about for a while and the 3DS price cut is my trigger for writing this, although it is certainly much broader than just the 3DS, Nintendo, or portable gaming.
I recently read an article that said one of the most valuable video game companies (the most valuable?) is Zynga, the people who brought you Farmville. This led to the discussion that small cheap casual games are going to destroy the "hardcore" video game industry. The idea is that complex games like Mass Effect, Portal, Mario Galaxy cannot directly compete with games like Farmville and Angry Birds. The complex games require lots of expertise and money to make and therefore cost much more. The simpler games cost much less. Consumers flock to simple casual games instead of hardcore complex games.
While I think that's a factor, I do not think it is the sole reason for the industry shrinking. Regardless, I think the hardcore game developers need to take this time to get lean and clean up the clutter. If we're dividing gamers into two groups of "casual" and "hardcore," I'd place myself in the latter. I love games and play them fairly frequently. But I buy one new game year, maybe. Sometimes not even that. The reason is that video games are becoming far too expensive of a hobby for me. I'm assuming others feel the same. A new game costs $60. For me to pay that, it has to be something really special (if I can afford it at all). For $60 I could buy 3 new movies on DVD, 3-6 music albums, or several books. Or I can enjoy several used games (3 to 10). My point is, between other competing media (certainly not just casual games), I can get more enjoyment with my $60.
I'm not trying to argue that other things are better than video games. I'm trying to say that new video game software and hardware have simply become too expensive to be enjoyed as a casual hobby like watching movies or reading books. To survive, video game prices need to go down and to do this game developers to cut down on wasteful spending and perhaps accept less profit.
I say look at the music industry. It is struggling really hard right now. The big companies are cutting corners and still not much is working for them. If the big labels were our only option, the music industry would soon be dead. But I believe other smaller companies will change it and make the music business OK again. And it is not as though the small labels produce lesser quality music (many would argue it's much better). The big companies will reform with them or die out. This analogy only works for so far, but I hope a point is made.
I think the big developers are more flexible than the big record labels (I mean, they make games for three competing system standards -PS3, 360, Wii- and those completely change about every five years). They can make this change when they have to.
What are your thoughts? Where do you agree or disagree with me? Are video games to expensive for you? Do you think developers can cut wasteful spending enough to significantly lower prices?