And what about the non-idiots you enjoy both Call of Duty and Halo?
They'll still buy CoD and Halo I suppose, but not as much as the casual gamer who only buys a few games a year.
And what counts as a medium-tier Dev. Any Dev who doesn't producing a FPS that sells tens of millions of copies?
Top tier dev would be Bungie, Blizzard, Valve, Rockstar, Infinity Ward, Treyarch.
Medium-Top tier dev would be Crytek, Bioware, Irrational Games, some of Ubisoft's games, Bethesda, etc.
Medium tier dev would be the guys who made Just Cause, some of Ubisoft's games, Gearbox, Obsidian, etc.
Low-Medium tier dev would be guys like Raven Software, who made Singularity, etc.
Low tier dev would be all the guys making small games who aren't indie.
Indie tier is really cheap ($15 games or less) games.
?100/?120 for Halo or CoD? Fuck that. No one would pay that kind of money for a game unless it came with some seriously incredible extras. We shouldn't be raising the fucking prices any higher than the ?60 mark. If anything it's just going to drive people from that tier completely. Can you imagine the bitchfits the Valve Fanboys would have when Valve's next game costs them that much? If anything, raising the prices of certain games higher than the current price makes the system more flawed than the current one.
That, is even more flawed and it would probably drive at least some of the "idiot market", as you say away from the games and since they're part of that "idiot" sub-group they won't be interested in the middle or lower-tier developers.
It's also an imperfect system, but a much better one that the one we have now.