It's sustainable because the gamer demographic has grown tremendously in the last 25 years as well. Bigger market, means more people buying AAA games in general, which allows for a larger budget without increasing the price and still being able to get a profit out of it.

That said, I'm not personally a fan of the latest generation having price increases. I went from buying games when they came out to just waiting until the games are half off and only buying games on release when there's a vital story I don't want to have spoiled for me. But 90% of my purchases are now only when the game is 50% off or more.