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Or they could just release a $399-449 box and blow PS4/X1 out the water. No need for subscription service, that would just bankrupt them, they would loose billions on hardware from the following years.

The only thing that I think keeps Nintendo on the low end of pricing is their company values and always wanting to appeal to the family market. Truth is the family market belong to whoever the market leader is (PS1, PS2, Wii). Unless Nintendo produces another wii, the majority of their market is just core fans who would happily pay $399 for a system if it had the right games.