Yeah... the product matters.
Which is why I think the PS2 did bad despite having a crappy buisness model.
It's a good model for your first generation when your trying to get in... but after that the risks aren't worth the possible rewards. Look how the PS3 burned through most of the PS2's money.
It was the same with Sega. It worked at first... but ended up costing them in the end.
The PS2 was so supply constrained for it's first year they likely could have charged way more early on and sold it at a profit, or at least break even point.
Loss Leading is only really good for getting market share for a follow up product in my opinion.
Sony's problems are I think their advertising model doesn't know how to handle being losers and their buisness execs don't understand how to handle things as a winner.
