"What I don't understand is, if the console market is so huge (which we know it is), why are the console game prices higher than PC games? Wouldn't you expect these higher volumes would lead to lower prices?"
The industry would have you believe its the high development costs, high costs of media, and piracy. In most cases, those are half truths if not flat out lies.
The "HD era" games are at $60 a piece for the same reason Bethesda expects you to pay $5 for horse armor.
The high cost of buying new has led me to prefer used purchases over new. Obviously this is bad for the developer and in some cases (such as Test Drive Unlimited) I would have really liked supporting the company with my dollar, but why pay a $30 premium just to do that? Especially when half the cars advertised with the game must be purchased seperately on Marketplace.