I'm wondering if he meant N64 and wrote PS1. N64 games got more expensive as the cartridge sizes went up in the generation.[/b]
No, they didn't, either. The standard MSRP on both came down, though there may be some specific games that were more. Again, I have receipts.
Sony raised their own MSRP from $40 to more variable pricing up to $50.
Across the board, no, not every PS1 game got more expensive. But Sony did once try to make the median price lower and then raised it.
At launch, all PS1 games were $59.99. If Sony went to $40 to $50, it was only after they'd dropped from $60 to $50 to $40.
edit: I do recall what you're talking about. I believe that was in response to them undercutting 3rd parties' MSRP of $50, something Nintendo also did (being $10 less than 3rd party games). Sony (re)raised their own published games to be in line with that.
edit2: Here are a couple of receipts I stuck up on my site a long time ago, when I had this same conversation with other people who incorrectly recall those days:
Jumping Flash, a Sony-published game, a month after release, 60 bucks.
Resident Evil, at release, 60 bucks.
Mario Kart 64, at release, 70 bucks.
Shadows of the Empire, a few months after release, 80 bucks.
In that old conversation, I was accused of the incredible stupidity of paying above MSRP. Please don't do that. It's absurd.