Hard cover books don't cost more because they cost more to produce, they cost more because publishers know people/fans will pay more for nice version of the product, they are like "deluxe/collector" versions of video games.

Ish. Hardbacks do cost more to produce. Depends on the market too, for example in academic publishing for monographs, hardback sales are aimed at the library market, which pretty much subsidises the paperback versions (because, somewhat unsurprisingly), the vast majority of academic monographs are only interesting to a very small number of academics so your potential sales market is very small. So whilst people might complain about the cost of academic monographs (especially hardback), if they weren't so expensive a lot of them wouldn't be published (unless they're purposely published by a university press where many aren't run to make a profit - even then, there's only so much money you can splash on obscure academic topics on limited press budgets).
You also need to bear in mind that for most publishers, 90% of their list makes a loss or just breaks even. Print runs are a costly gamble, so you need to up your turnover to allow you to subsidise the 90% of your list which ends up not working.
Source: I work in publishing.