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Lots of people (especially in the third world) use their phone as their primary computer and gaming device.

Yes, and they're better off spending 200€ for a phone and whatever remains for a gaming device and computer rather than caring what 1200$ phone do.

Today's $1200 phone is tomorrow's $200 phone, both in terms of the secondhand market and advancements / price reductions over time.

Or they can just play on their phones. What you want is not what everyone wants.

Also the ones that can afford a $1000 phone? I thought that was the case for people that cannot afford a computer

Lots of phones go down in price or they're specifically geared for that market by having a beefy CPU and GPU but bottom-tier everything else.