They'll price themselves out of the market if they do that. Remember a big part of the gaming market is children and preteens begging their parents to spend a few hundred dollars on a virtual babysitter.
Older teenagers and adults might be able to swing over $500 but a lot of people under the age of 14 or 15 are going to be SOL.
Wait. That could be a good thing, particularly for Call of Duty multiplayer.