retort of a corporate man [...] says that a 'decent' game should be worth $40-60.
Yep. His interest is (presumably) keeping his job. That means maximizing the profits of his company. His company makes big-name titles (I for one love the Zelda series, and tetris on the game boy wasn't half bad :D), so of course he wants everyone to believe that big-name titles are the best and worthy of the consumers' money. His interests are, of course, not necessarily aligned with those of the public. Probably not, in this case---otherwise he, an MBA schooled in some economics, would just put his faith in the invisible hand of the market.
more products are not produced and sold, because that would decrease the 'optimum' point.
What you're saying implies, if you think about it, that every sector is behaving like a cartel: the producers are cooperating (rather than competing) in their efforts to make as much money as possible.
If I was running my own company, I'd be a cold-hearted asshole and drop the price below what the cartel is charging and advertise this in as many places as possible, hoping to grab all the customers to myself and making a killing. Now, if these slimy weasel-suckers are half disgusting as me, they'd do the same. You're saying they don't?
corporations determining the price points (even unknowingly) instead of [the] public.
If the markets work the way economists think they do, the public exercises an influence on the price by buying some amounts at some price points and different amounts at different price points, thus influence what the optimal price (for the seller) is.
You may also want to add economics to your podcasting list, at econtalk.org, or watching a few video lectures at http://www.youtube.com/user/jodiecongirl#p/c/22785443C5FB0F83 (the latter being more technical and mathematical).
This is not to say "Corporations: good" or "Competition: bad"---on the contrary. I just don't think that all corporations in every sector form cartels: the benefit of undercutting the cartel is a too strong temptation, especially whenever there are more actors in the sector. (And "Yay, go the little guy!")