Microsoft's Xbox Live Arcade downloadable game service for the Xbox 360 has been a part of the console since it launched in 2005. In the beginning, many games were priced at 400 Microsoft points (about $5). The average price of a game on the service has been going up over the years, with Gamesindustry.biz (free registration required) reporting that Xbox Live Arcade's portfolio director Chris Charla admitted this week, " ... you can see that average prices on XBLA have crept up over the last few years."
The story states that back in 2009 just 21 of the of the 86 games released via Xbox Live Arcade were priced at 1200 Microsoft points each (about $15). In 2010 27 of the 86 games on Xbox Live Arcade were priced at 1200 Microsoft points. While it's still mid-July 2011, Xbox Live Arcade has already released 20 games for 1200 Microsoft points.
This trend towards higher prices on Xbox Live Arcade has been contrary to the entire downloadable games industry which has seen prices taking significant drops. This is especially evident for games designed for mobile phones such as the iPhone or Android-based phones where its extremely rare to see a game priced for more than $10. However Charla suggests that higher priced games lead to better quality games overall, including comparing them to retail based games. He states, "I think the games that we're shipping - a Limbo or a Castle Crashers - are as good as anything on the market." However Charla would not comment if Microsoft might offer downloadable free-to-play games in the future.