The one flaw in the $60 versus $600 argument is that the games themselves are not 10 times better than they used to be. In fact, some of them are less fun. It may cost a lot to turn out next-gen graphics, but in terms of gameplay designs many publishers are just slapping on the same old cookie-cutter template they developed in the PS1 era (the last major innovation in game design was the move to 3D - everything since has been refining that).

Also, I think your logic that publishers raising the prices on franchise games will lead to more innovation is a bit dodgy. It seems to me that the lack of innovation can be blamed partly on the fact that games like Call of Duty, Forza, Halo etc. continue to sell millions of copies - so why should the industry try to innovate when some of the least innovative games sell the best? In other words, by buying these overpriced releases this holiday, you’re actually sending the message you don’t want innovation in your games. The publishers will only start innovating when the same old, same old stops selling at inflated prices.

I actually agree with the general idea that price hikes are overdue in terms of improving the industry’s financial health, however I’m not convinced they will spur much innovation. Sometimes, the opposite is true: innovation is only seen when industries get desperate. Financial desperation motivated Squaresoft to create the Final Fantasy franchise. Financial desperation motivated Nintendo to create the DS and Wii (for better or worse). Financial desperation is what is motivating most indie developers. And so on. When companies get rich and complacent, they may actually be less likely to invest in new ideas because they see no need since the money is rolling in with established paradigms.