While AAA games do include radically new designs, new engines, targeting new hardware, and sometimes taking three years and many hundred people, that situation is the exception. And it certainly does not reach the $300M range.
We all know that Halo 4 is right at the top end of the spectrum, but it's for the sake of example - it's the kind of game that can justify that kind of budget, as it doesn't even need to make a profit to be considered successful as far as Microsoft is concerned - it exists to perpetuate a franchise and to sell hardware by proxy. With a large studio located in Seattle (the second most expensive place to operate a studio in the US, with Microsoft's apparent average salary at $107k), with an associated R&D department building a new engine and working close to the hardware, creating a new set of assets (few assets were reused from the previous title) a high volume of content including an excessive outsourcing of material (like the Spartan Ops CGI cutscenes), it's going to be a very expensive operation to run. Let's not forget that development of that game was ongoing
at the time of release, and incorporates a fairly heavy online component (servers and additional server side software don't run and maintain themselves, after all).
GTA V is another example of a game that could also easily have cost a typical Hollywood movie budget. GTA V is much harder to estimate, as the development of the game is split over a number of different studios (much like how Ubisoft's internal games are handled) - it is probably considerably cheaper simply by virtue of the studio locations themselves, Edinburgh as an example is a fairly cheap location, and browsing software developer job postings rarely sees them leave the range of £20-40k (junior to senior).
Thanks to recent law suits, we know that Too Human had a development tag of around $60 million. Skyrim is reported to have cost $85 million, though I don't know how reputable that number is. Thanks to Yerli's comments about Piracy, we now also know that Crysis cost $22 million and Crysis 3 reached at least triple that. Each of the Half-Life Episodes cost around $10 million each, and that relied on a lot of recycling.
Games no longer always have a single development cost and a single release now though, in the last five years this has changed dramatically and most games include additional content that may be a part of the initial purchase, and a significant online component - you now need to consider the ongoing development costs of this additional content and functionality as development isn't free after all (Halo 4's Spartan Ops, GTA V's online game and DLC).
Most AAA games are incremental releases.
Some games are incremental releases, some studios will do this more than others, and rely on their existing assets / pipelines / tools to varying extents. Even when this is the case, production costs can still vary wildly. Using Gears of War as a reference (whose development costs have been made public), the first game and second games were pushed out with a development budget of $10-15 million and teams numbering around thirty, however the third in the series is reported to have cost more than double it's predecessors and lists a considerably larger number of people in it's credits. We also have to remember that this only factors in the internal cost of the game, outsourcing is not included in these numbers though was heavily used, nor the cost of engine, tools and other internal resources such as software is not included in these budgets (already having been facilitated and absorbed by Epic's primary business.
have development teams in the 20 person range with just a few months of development time. They can also have larger teams of 50, 100, or more people, and can last a year, two years, or rarely three years. For AAA game a development budget of $10 to $15 million is fairly common.
AAA development teams numbering 20-odd people are now rare and an exception rather than a rule - iD might have had between 20 and 30 people on Doom 3, but they had ~75 working on Rage, and the studio now employs around 200 people, although we can only guess what those people are actually doing and responsible for. Studios with that few people in them are likely going to be heavily reliant on outsourcing.
Very few games have 'just a few months of development time'. The only thing I can think of that manages that would be the annually exploited sports franchises (EA, I'm looking at you), where the game hasn't changed much and really is just a minor iteration, or the tiny expansion packs for popular games like the Sims that do very little in reality (EA, I'm looking at you again). Games like those in the Call of Duty franchise still have a turnaround of around 18-24 months, with two studios alternating their main releases, and each maintaining more than one internal project in order to manage their annual releases, and this is a franchise that still very heavily recycles more or less everything. Only Modern Warfare 2's costs have ever found their way into the public domain, and it's reported to be a little under $50 million (with triple that spent on marketing).
Your estimate of $60M is interesting. That was approximately the cost to develop World of Warcraft. (Various official sources have stated different numbers, most between $40M and $60M) WoW was one of the largest video game budgets at the time. A few of the more recent MMOs have begun to reach the $100M mark, but these are the largest and riskiest creations in the industry.
It's important to remember that World of Warcraft was ten years and two game generations ago now - it's also important to remember that when it released it was a considerably smaller product than it is now. I would be surprised if post-launch development hasn't more than doubled the cost of the initial offering, and maintaining the online infrastructure involved must come with some insane costs. Modern MMOGs will certainly be reaching costs of $100 million by now.
The last console title I worked on for a full cycle licensed an engine, maintained a team of around 70 developers over an 18 month period, outsourced heavily and spent a fair bit on external user research, internal QA, motion capture and hardware orientated R&D. We genuinely struggled to ship the product on time and had to crunch heavily for a very extended period of time (which costs a lot in itself!). I'm told the combined development and marketing cost of the title reached nearly $90 million all told.
I don't believe that AAA games have had $5 million budgets for nearly a decade, and certainly not towards the end of the previous hardware generation, we won't see it in the current generation. $10 million budgets are where the AAA probably begins for development costs, and it'll explode outwards from there until you reach the $100+ million outliers.