There are still production cost, and rather than look at SNES, look at the price of games in PS1 era, Pre-digital download, they are not that much different than it is now. I am sure people had the same moan and complaint when they went from cartridge to CD/DVDs.
Name me a AAA game in the past few years that has failed to turn a profit?
As I said above yes costs of making a game have gone up however there are more and more ways to make money from the game then there were before.
GTA 5 is a game that made 1billion dollors in what 3 days. it has sold 60+ million copies and been released 3 different times over 5 different systems and please don't tell me the cost of putting it onto the ps4 etc cost a massive unsustainable amount