Comment Re:SNAFU? Not necessarily... (Score 1) 117
Most of the time (and including earlier PS3), console hardware is sold at a loss to push it into the market and the vendor regains the money from game sales. The Wii was the first among the current generation consoles that broke this tradition.
This "everyone sells its console at a loss" is a myth.
This was never a tradition, so the Wii didn't break any tradition. Nintendo is the older console manufacturer still alive, so is the traditional one, and they never sold their console at a loss, except the very first months of Gamecube because they quickly dropped the price before launch.
Sony is the big one that introduced this business tactic that was then followed by several companies or gaming division of companies which all met their demise. This includes Sega, MS and Sony.
You'll rightly tell me MS and Sony gaming divisions are not dead, but the only reason why is because they are big enough and had enough profit in other divisions to stand the billions of dollars they lost by using this tactic.
This tactic only works when you're the one with the biggest market: the one with the more consoles and who sells the most games. When you don't, you fail harder to the point of not being able to sustain it even one generation.
The net result of XBox is a loss of 6+ billions of dollars, as for the PS3, they lost as much as they profited with the PS1 and PS2 combined! Two generations of profits (due to being market leader) erased with only one generation of loss (due to not being leader).