Lord N said:
In what world? $400 and especially the launch price of $500-$600 is far more than what most people are willing to pay for a video game console no matter what it does. The vast majority of all consoles were sold at a price of $200-$300 dollars whereas consoles priced above that have done rather poorly. The fact that the PS3 and 360 with their rather slow sales are the best selling consoles at their respective price points should tell you a lot. Had the PS3 launched at $299, whether it would have been able to outsell the Wii is up for debate(personally, I think the Wii would still be outselling it), but it's pretty obvious that its sales would be a hell of a lot higher than what they are right now.
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People seem to be able to find $500 when a peice of electronics that they desire ...
I'm not saying that people are used to spending $500 for a console, but people also weren't used to spending $400 on a MP3 player before the iPod was released ...