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They have come down in price to around the £40 mark for new releases in recent times. I remember paying £55 for metal gear solid 2 fortune ps 2 back in the day.
IMO £40 is reasonable, anything over this is amount is starting to take the mick.
It's because piracy on the current crop of consoles is fairly low in comparison to the previous few generations. Obviously it's still do-able but you risk being banned from PSN or Live and as most people play online now they don't want that to happen. They know people won't pirate because of this so they can quite frankly charge what they like.
If you look at the cost of PC games they are generally lower due to piracy being high on that platform and the games are cheaper to try and make them more attractive to would-be pirates. In terms of playing the pirated games online on a PC it has recently become much easier due to easier to use VPNs and a crack that tricks steam in to thinking you own the game.