Spankey said:
isn't that what they're trying to do with the PS3?
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And look how this turned out for them. Billions in the red. Profitability out of sight. No hope of ever recouping the costs even in the very long run.
As NJ5 said - the days of the lose-leading console business model are over. No one in their right mind will ever attempt it again. From here on it is about efficiency and maintaining the large install base and moving the base slowly to more features without pressing the reset button.
This works great for the Wii and the 360. This is terrible for the PS3 which has the smallest base and the worst business model to make money off the base it has (no subscriptions, no accessories, no huge 1st party titles ala Nintendo).
The days of the big disruptive new gens are over. No more resets. No PS4.
Prediction made on 11/1/2008:
Q4 2008: 27M xbox LTD, 20M PS3 LTD . 2009 sales: 11M xbox, 9M PS3