Are expensive games becoming unfeasible?

Reading the latest issue of MCV, it's very easy to get the impression that there is a lot to be worried about in games development. Both the US and Japanese retail markets show a fall in game software sales of around 24%. When you take into account the fact that this software is now spread across a larger number of platforms, the likelihood that a game is profitable is diminishing rapidly.

What this tells me is that the expensive (to make) games for the new consoles are going to be few and far between because most development studios will be unable to secure the huge costs necessary. The funding required is likely only going to be available to those who can demonstrate an incredibly strong track record or who can build on an existing franchise.

Those whose forecast low sales for their games will have to work with a budget that is unlikely to allow them to take advantages of the power of the new platforms and so are therefore unlikely to get the concept approval from Sony or Microsoft.

With retail game prices not rising in direct proportion to the development costs and being further exacerbated by large supermarket chains discounting top titles, it's difficult to see any kind of development model that suggests expensive games are feasible to the majority of developers.

I think that most development studios are going to have to seriously look at how they are going to structure themselves so they can develop games in a way that allows them to continue in business.