Comment Re:They are also worried about unlicensed devs (Score 1) 267
Consoles are subsidized through software licensing, as has already pointed out. The fact that Sony has "other, substantial businesses" helped when the console slogged through its first few years, but the only console producer that has consistently profited from hardware is Nintendo.
It's the "razor and blades" business model, and its application in the video gaming industry is a lot more forgiving to consumers than it is in many other contexts. At least with video games, there's a healthy second-hand market (no, Mr. Bear, I have no interest in your used Mach III blades, thank you very much) and the option to wait for prices to drop... unless we're talking about Call of Duty 4, which will still be $40 long after we're dead.