Unpopular Opinion
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I would also like to add that 30 years ago devs had to write the engine and devtools from scratch. Player hardware and optimizations were also massive pain points that needed attention.
I would argue that cost of development has gotten CHEAPER than it was 30 years ago, even when taking the scope of today's games into account. Not to mention the market is also orders of magnitude bigger.
Any schmuk today can take Unity/UE5/Godot and make something playable in a matter of days. Barrier to entry is practically non existent. Look at Palworld, Vampire Survivors, Among Us, Balatro, Terraria. For studios with AAA-level scope look at Larian studios, Warhorse studios, Eleventh hour games, Hello games.
Large studio execs with 0 substance who don't know what they're doing are spouting this inflation drivel as justification to raise prices of their already failing games as AA and indie teams run CIRCLES around them.
Maybe development in the sense that it is easier for programmers to put together the logic of the game, but game budgets are in the hundreds of millions now they have not gotten cheaper. You're forgetting that artists are needed to create all the high quality textures and objects needed to populate the gameworld. As gamers have called for more and more unrealistic standards of graphical fidelity, more and more budgets have gone to the legions of graphical artists necessary.
They're still underpaying them, but indies can get away with having maybe one guy as their whole art team. Check the credits for how many studios helped the art for the next AAA game you play.
Been around long enough to remember it wasn't the gamers doing that, it was the game makers. Specifically the c-suites
There's 0 justification for games going up in cost other than the c-suites, end of story