How is it crazy? The marginal cost to produce a copy of a video game is ~$0 and the market is much larger now then it was so fixed costs can be spread around more. The sticker price was always more or less arbitrary chosen - i.e. to maximize profits, which includes how the number is perceived.

And to think that AAA video game was distributed on cartridge with expensive memory in cardboard packaging with a manual while these days that same $60 game is just a digital download from a CDN.