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alabtrosMyster said:

That sounds like the PSP Go Sony tried to pull on US a while ago! MS is bringing us the future I guess...

PSP Go also didn't have a peer competitor, so retailers did not have any leverage vs. policies that would remove their game disc sale profits.

If XBone tried that, retailers can just stop selling it, or ordering more after they clear their inventory.

If they did continue to sell it, they would certainly seek a higher mark up than for PS4 to make up for lost game disc sales potential.

That would defeat the point in removing a $20 part from the unit.

alabtrosMyster said:

MS should stop believing they offer a premium device and embrace their lower end status...

price accordingly, take a hit on the hardware profits (like Sony does) and make the money back on the software sales

What evidence do you have that Sony takes a hit on hardware profit vs Microsoft?

Sony's CPU/GPU is slightly smaller, thus cheaper, than MS' despite having 50% more cores (and 2x the ROP, and 8x GPGPU threads),

because MS put ESRAM on-die to compensate for slow RAM, and that takes up a huge amount of die space.

Sony's RAM may be marginally more expensive, but MS has also stated that Kinect2 costs $150 while they charge only $100 more.

If anything, I might guess that MS is making less profit on initial console sales.

Sony has stated that they are making a small profit on each console if one game sale  is included, which is a given.