Its a shame gamers can't be more united when it comes to things like this. If no one bought the game at the higher price activision would have no choice but to lower the price back to what it orginally was, of course this is never going to happen because everyone that likes modern warfare will want the second one on day one.

Where is that? London? But yeah, like you said, stores were limited back then. I seem to remember Trago catering for most of my C64, SNES and PC needs back then. That might explain the lower prices.

Exeter.... Trago mills?? :-o
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A few interesting articles i've been reading recently about the other side of the equation - the cost of making games:
http://www.industrygamers.com/news/game-industry-on-a-bad-spiral-says-lou-castle/
http://www.industrygamers.com/news/video-game-business-in-need-of-reform-retail-dead-in-5-years-say-developers/
http://news.bbc.co.uk/2/hi/technology/8201332.stm

Yeah, Trago Mills, Newton Abbot. :)
Interesting articles. They're further compounded by the general failure of both the PS3 and 360 to generate a profit.
Maybe future consoles will be inexpensive and rather than process the games themselves, they'll stream the audio/visual content from a central super-powerful server. That would certainly tie in with the move to online retail and solve the problems regarding console costs to boot. Although it would present a whole host of its own problems, of course.
Such units are already in development. But I doubt it will really take off until MS, Nintendo and/or Sony bite.
Either way, I don't see retail copies of games disappearing any time soon, even if retail stores do.

PC Games were about the same. The bargain bin was my favorite place to shop. The big beautiful red bin looking at you with lusty eyes. They were usually around 10$ to 20$ bucks. I'd go hunt around at office supply stores, Egghead Software, Software ETC, KB ToyStore, Toys R Us, and Target. Some places didn't have a bin but the concept was the same. I still do it to this day. Mostly for nostalgia when this were simpler.
I think console games were 50$. I'm not 100% sure. I was out of the console loop for a while. I even missed out on Dreamcast.
I remember my friend paying 70$ for Phantasy Star Generations of Doom for Genesis from Target.

cant say about australia
but i do remember games costing around 150 zloty (currently: 51 bucks) in late nineties.
then the prices began to fall with most games (excluding microsoft) costing around 100 zloty and many even lower.
since then prizes went up a bit but not that much. GTA4 cost 140 zloty atm. and it is one of the more expensive games out there.
speaking about pc games

This pipe dream will never die it seems. As you said there's problems, speed of light being the most insurmountable and cheap shit networks being the next.

Yet it's still being pursued. I don't know how they expect most connections - or indeed the networks that sustain them - to be adequate enough to meet such demands. But there it is all the same. People keep on trying.

I'm going to chime in and say out of the games I bought in the 90's I don't remember ever paying more than $30 US for a game, but I bought my games used, never paid the full retail price ;) My recollection of the 90's is hazy at best... I won't go into specifics but my memory of the 21st century is much better.

At least here (US), prices went down significantly during the disc era and gradually inched back up.
New NES carts were 49.99. SNES carts were outrageous. I remember Final Fantasy being at least 59.99 and Final Fight 2 being something like 69.99. They charged a fortune for anything with a "chip" in it too. That was a gimmick and a half. Lots of games during the 16bit generation were 59.99-69.99
Ps1 had much lower prices - many of the games started at 39.99. Ps2/XB prices inched up to 49.99 (though it's 39.99 again). XB360/PS3 new title price is 59.99.
I'd have to adjust for inflation, but I doubt that the difference in price between ps2 and xbox is huge in real dollars, even if it's still an increase. In today's dollars SNES carts were far and away the winner. Presumably followed by NES carts. Disc media is much cheaper than carts. I remember hearing back then that it cost @$5 or $6/per cartridge media wholesale.
I honestly don't know the price of most PC games. I never really had a gaming quality PC until I got to college and built one for myself.
edit: someone I vaguely know did research on this. looking for the link in my favorites.

Sweet. I used to buy toys there when my mother took me... don't remember ever using it as a source of games though.
it might just have been that i didn't know where to find the bargains back then. (in the pre interweb days).
Seems like gaming really needs to change the model... maybe to something more like tv/movies.
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I seem to remember there was a big video games crash in the UK. All the games mags were competing so much that they all started giving away free games... and in the end it almost killed both the game market and the magazine market.