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1. You don't need a $300 GPU to play modern games on a gaming PC. 2. Sony and Microsoft subsidize the cost of the hardware. They lose money on every console that goes out the door and make their cash on online passes, accessories and individual games. After a couple years the cost to produce goes down and they start to make some margin on them.

This is the way they've been doing it for several console generations now.

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I have a memory of reading that the strategy Nintendo have used from the n64 days, was always make a slight loss on each console but make big profit on games and developer licences, so that they start making profit after the third or fourth game sold per console

Edit: looked for proof but for the life of me I can't find evidence amongst all the results for articles and blog posts reminiscing about old games and consoles!

Nintendo is the exception where the hardware are *not* sold at loss, but rather alight profit.

See https://www.google.com/amp/s/venturebeat.com/2016/10/26/nint...

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