The Washington Post recently wrote an article talking about the strange market conditions in the gaming industry. On one hand, you have an industry that is growing exponentially every year, rivaling revenue of the movie and music industry. One the other hand, the price point for a single game still remains at $50 for most titles.

Now, as gamers we certainly don’t want to see an increase in price. The thought of a $70 game makes me twitch. In fact, sometimes spending $50 for a brand new game gives me hesitation. However, with the ever increasing budget of game development, it’s hard to see this industry sustaining itself without increasing prices.

In my eyes there are a couple of options. One is to continue game development as normal and find other means of cutting costs. We have already seen many large companies lay off people this year. While consolidating work and restructuring people will certainly help, what I’m talking about are things like online distribution.

With online distribution you can cut out costs like retail stocking fees and packaging. Peter Moore of Microsoft spoke about just how absurd it will be for our kids to even fathom that we drove to the store to pick up a game and then had to drive back just to put it in our system. Much like consumers have flocked to iTunes, an online distribution method for games just makes sense.

That’s not to say that anyone has it right yet, or that there is one right way. But certainly following some sort of iTunes like method or Steam method, companies will figure it out and not only save themselves money, but also save consumers time and money.

The second option for this ever increasing cost of making games is to actually reduce the cost of making games. If development costs are lowered and the price of entry is also lowered, everyone wins.

Now lets look at what Nintendo is doing in the market right now. Development kits for the Revolution are going out and developers are stating that they are inexpensive to buy and easy to work with, as the technology is based on the GameCube environment. Nintendo is also touting gameplay and new experiences over eye-shattering graphics. This doesn’t mean that we will see Cubivore type graphics on the Revolution, it simply means that the focus isn’t solely on pushing the graphics to the limit.

If a development studio adopts this approach to working on the Revolution than costs should be cheaper. They will not need as many artists, modellers, programmers, etc. to complete one game. You can already see the philosophy at work within Nintendo itself. The team that made Brain Training only consisted of 10 people and was completed in just a few months. The Wario Ware series has also been stated to have small teams and short lead times. Rub Rabbits from Sega employed 15 people and had a fairly short development time.

Now, DS titles are going to be slightly different than a full blown console title, but the theories are the same. Worry about the game first and the graphics will come. A game like Wario Ware didn’t need photo realistic graphics. Rub Rabbits had a distinctive style. Games like Wind Waker, Twilight Princess and Resident Evil 4 all had great graphics that can be considered more mature and more detailed, but again, they fit with the theme of the game. Certainly these latter games required more people and time, but that was a calculated decision on the developers part, not some feeling on pressure to conform to a graphics standard.

Now, onto the Nintendo Virtual Console. With this service Nintendo will allow consumers access to their entire library from their homes. This is huge. No longer do you have to scour game stores or eBay for those great classic games; they are all right there at your finger tips. Not only is this convenient for gamers, but it will certainly be profitable for Nintendo. Profitable monetarily and profitable in terms of mind-share in the industry.

And though we still know little about the Virtual Console, if Nintendo sees fit to offer the service as a way for developers to distribute games, much like Microsoft is doing with Xbox Live, it could open up a whole new market for smaller companies. Not to mention all those large publishers like Sega and Capcom who could offer their vast backlog of titles on the service.

So, while the cost of developing games will continue to increase, and game prices will also certainly do so in time, Nintendo is offering a way for developers, both large and small, to get their games to the masses on the cheap. The trick will be to see if consumers adopt this approach. From what I can tell, they will do it with open arms. I know I’m sick of dealing with stores like EB Games and Gamestop. I know I’d gladly zing a developer $20 for a great independent game that I can buy online. And we all know that the day we get our Revolutions we will just have to have some of those old classics.

This industry is growing amazingly fast and with that comes some pains. But, with such a huge and growing customer base and such talented developers, gaming is going nowhere. Thanks to the foresight of companies like Nintendo, gaming will be allowed to continue growing without stumbling all over itself.