Beldaran, the price of games DID go down. N64 games cost as much as 80$! The same happened in the NES and SNES days. Large ROM sizes and the cost of battery or eeprom components to save games added to the cost.
When Playstation and Sega Saturn came around, prices fell to what we were used for quite some time. 40$ and 50$ for new games. But then with the Xbox 360 and PS3 they decided to jack it up 10 bucks. But the switch to optical media did make manufacturing costs go down.