I don't have much disposable income so I heavily rely on pre-owned and Classic/Platinum re-releases (lower price) bought online at bumper prices. I hardly ever buy in retail stores, I never get as good a deal as online, even when factoring in shipping costs. Occasionally some promotion or trade in deal gets me or some really cheap bargain bin title but usually I'd rather bide my time and wait for AAA games to drop in price.
I suppose I am lagging behind a bit in gaming as I did not move on to 360 till I had really played every 6th gen game that was worth playing. Similar with PC. But this works out well for me as while Gears of War initially retailed for £40 I managed to recently pick it up NEW for about £12 from Amazon.co.uk.
As I slowly play through all the best of 2007 by the time I get to 2009 they will have dropped to a reasonable price. Maybe even Modern Warfare 2 will have dropped to a reasonable price, I'm not done with COD4 yet, haven't even played COD:WAW yet so I can easily wait and would rather wait. Everyone should wait and teach Activision a lesson for this blatant price gouging. MW2 does not cost significantly more to make, they are just milking it.
Another benefit of waiting is you can reconsider a title once the hype has died down and the studios have less control over skewing the review scores with selective previews. You really get an idea of what games are really worth it if there is still buzz for it a year or so after launch. Also get to see which game fares better in DLC and so on.
PC games do me great, generally only £25-£30 new compared to £40-£45 for console titles while for certain developers they are much better on PC in terms of graphics, performance, controls, patches, online, etc. I mean Bioshock is now going for only £13 on Steam. The back-catalogue packs have also been great and Orange Box is still the best £30 I have ever spent and am still playing it 2 years later.
XBLA is a godsend. Games like Shadow Complex for less than a tenner and classics like Wolfenstein 3D for just over 3 quid just seem too good to be true. PSN is nice too.
Ultimately, I am very reluctant to pay more than £20 for a game, unless it has some really exceptional value like a large game-pack, or has really amazing multiplayer. But more important than mere length of play and replay is variety of that gameplay and that means even the 100 hour RPGs aren't going to make a £40 game seem any more appealing.