You still forget that the industry has already adapted to these "Rising Costs" with their DLC, Season Passes, Microtransactions, Pre-orders and God-forsaken Loot Boxes. So that really isn't up for discussion. As for the extinction of the AA / Mid-Tier market. I used to believe that until I saw Travis Strikes Back: No More Heroes, plentyy of games that have become popular that started as indie like Cuphead and Hellblade. Senua's Sacrifice. and such.
But the problem here is, licensed games are not a niche and they are exempt from going through this trouble. As such, more consumers will be bound to buying this game just because of brand recognition alone.