A DS game box has around the same size of a PS3 game case (they are smaller than DVDs cases) thick vs length.
Thats down to the design , there is no reason why the box couldn't be smaller. Just look at dvds and blurays. Why are dvd cases so big compared to bluray cases even though bluray discs are the same size ? You an design a ds game case to be as thin as a bluray case but half the size or more in height and width. Of course at a point you will loose display size.
By 2010 the cost to press a BD will be measured in pennies. So why not just increase the price to $65 and release on BD anyway? I cant see how having a game on SD would ever benefit publishers (other than the console manufacturer).
Dvd's don't even cost pennies. Dual layer dvds i believe are still in the quarter range. Regardless , with flash ram soultions you will gain speed , capaicty and seek time advantages .
Case in point you can design a packaging for up to 8 sd cards or flash ram types in the packaging. Modern sd can hit 30MB/s. So 2 = 60MB/s , 4= 120MB/s , 8 = 240MBs . A 12x bluray will hit I believe in the 50MB/s mark. So in this situation if you can actually scale up hte size of the cart along with its speed. So if in 2011 8 sd cards cost $3 in bluk you can use 2 of them at a $6 cost and have a 16 gig game with a 60MB/s transfer rate. Or for $12 if you need it you can have a 32 gig game with a 120MB/s transfer rate you can get it . At the end of the generation 32 gig sd cards may cost $3 in bluk and you can have much larger games.
Of course cost will be more , but this option has more positves . Right now you can buy a 16 GB sdhc card for $40 and a 8GB shdc card for $16 . If the xbox doesn't launch till 2010 we will see another 2 years of price drops on both of these.
I'm not sure how much extra devs are willing to spend but if ms is ordering in the millions costs should go down drasticly. In the next 2-3 years we should also see them use a smaller micron process . So we should see 64GB , 128GB and greater capacitys . So while the 4 gig sdhc card wont drop under the $5-10 market (which seems ot be the limit flash ram) we should see greater capacitys most likely up to 16 gigs hit that price point
Another thing is the console itself. You'd save alot of room with a sd card reader over a disc drive and have a lower failure rate and no scratched disks . Just take the 360 and remove the dvd drive. you can use the memory card slot as a decent size for what a flash drive for the system would be like. You'd be able to reduce the 360 size greatly. Thus reducing costs of the console all around.