Devs are already having trouble with the high budgets of this generation. We don't need studios going out of business trying to make avatar. Jesus. Sony and MS should just focus on making the consoles easy to develop for.
Most of the benefits of next gen wont cause devs costs to go up.
Early on this gen, devs struggled to find a workflow to create HD assets at to develop for new advanced hardware. Even Epic themselves had to outsource character model creation of the stranded for Gears 1.
That was then. Now Developers have much
better tools for the engines they use and workflows are quick. Assets for current gen games are created at much higher resolution than the consoles can handle, and then dumbed down..
Look at Gears Models.
They are already created in super high fidelity, then dumbed down for the games cut scenes, then dumbed down a bit further for actual gameplay.
A theoretical next gen Gears launch game could use pretty much the same quality models they created for Gears 3, maybe
slightly more detailed.
The improvements are going to come from engine effects, new lighting, subsurface scattering, Bokeh Depth of Field, Real Time Reflections, Volumetric Effects, Enhanced Physics, Tessellation, Hit Detection, and the ability to throw a ton more NPC's at once into the fray, on to larger scale maps. Not to mention if devs choose to they can push 1080p with AA and AF and have amazing IQ on a game, especially if the graphics aren't "AAA"
A smaller developer, or an indy dev will still benefit from better hardware.
Look at Sins of a Solar Empire, the games graphics weren't exactly mind melting, especially at launch, but the game still benefits greatly from more powerful hardware because it allows the player to play larger scale games. That does not increase dev costs, but it does allow the developer to see their vision come to fruition.
Look at all the compromises we make for today's games and the vision of what they should be. How many vistas today are ruined by the fact that the skybox is low resolution in order to save the framerate? That is a consistent problem this gen.
Look at Mass Effect 3 having to take holstering away because they didn't have enough Ram left to squeeze.
Or look at Battlefield 3 who's maps had to be reduced in size and who's player count went from 64 to 24 on consoles.
Or Skyrim who still is missing levitation spells because cities are separate cells. And in which you can't see out or into a window as a thief to spy on NPCs because the hardware is inadequate.
Or LittleBigPlanet where a player is limited in his creations by the consoles small amount of memory.
Or any number of games where an epic battle between nations or worlds is shown as a 6 on 6 NPC battle because the hardware can't handle larger scale conflicts.
I could go on for HOURS about how the current consoles limit developers of all sizes, and hamper their ability to deliver their vision to the world. Next gen hardware will give developers extra headroom to do some more of the things they want. Period.
