From my experience with tech companies... they generally do not run lean. They throw many many bodies at a problem and then drop them when they need to cut back. It is a frightful practice.
Now, does the games industry do the same? I don't know, but the layoffs recently show something is wrong, somewhere.
Should game prices increase? No, not with the current state of games. There are few complete games anymore (microtransactions etc) or games released in incomplete states (cut-content for the DLC, bugs) that I'm sceptical of laying down any outlay on something that may be a waste of time.
This is without mentioning how stagnant releases are starting to feel. Remasters, remakes, the same game with a different skin (everything Ubisoft... Sony games are starting to feel homogenous, any of the live service shooters are just the same thing....) then it just weeds out the interest.
Could game prices increase? Maybe, if the above is addressed, but to be honest with most major publishers this is likely never going to happen as not cutting corners affects profit.
Otherwise, what's the point? I will become really risk averse. I got a years free PS Deluxe and so far I just play whatever is on that for free, why would I spend real money on something that could be trash, broken, or just plain boring? I lose out of the latest and "greatest" releases, but that doesn't bother me.
But, since profit is god, game quality will continue to decline, and people (game developers) will be treated like shite. Prices will increase, and when they do, it won't suddenly make publishers do better, and developers won't see a penny of this (unless they have stock options, I guess).
Disclaimer: There are still some good games coming out, but generally I think there is a greater amount of trash to gold, in my opinion.