Razor Blade principle (Score 1)

This is hardly breaking news. Since the advent of video games, developers have lost money on the hardware...in hopes of recouping it on the software side. Microsoft nor Sony were the first to do this. And no, Microsoft isn't doing this purposely to corner the market...they're doing it because the market dictates a certain price point to be successful. And Microsoft knew that they would have to encounter losses, just like they did with the Xbox, just like Sony did with the PS2, and just like Sony will do with the PS3. The Dreamcast didn't survive because Sega couldn't sell enough games to bring the profit back from the cost of hardware. Gilette, Schick, etc. all lose money on selling razors. That's why you can buy one for less than ten bucks. But the blades on the other hand....much higher. That's where they make their profit.