I'm not particularly concerned about Sega's exist of the console market myself (nor am I wishing that Sony fans feel the loss of their favorite company, it wasn't their fault), I think they would have been forced out even if Sony was not playing 'razors and blades'. My issue with this general strategy is that it has a profound effect on the overall industry. Part of this strategy is the subsidization of development for the platform, which has helped to encourage bloated budgets, and third parties have also exploited this by playing Sony and MS against each other, and both against Nintendo. I think the games industry will be a lot healthier when this practice ends, even if it means going through a crash first.
A game I'm developing with some friends:
www.xnagg.com/zombieasteroids/publish.htm
It is largely a technical exercise but feedback is appreciated.