[quote name='6669']Yeah, so that makes a $60 value alone. I dont see why everyone's upset with the price. Its a lot less than $600.[/QUOTE]
There was an insane post at Joystiq about why $250 is too much:
If companies like Sony and Microsoft want to subsidize their consoles to the the point that they're losing money on every unit sold, shouldn't we (as rational consumers) want to take advantage of this built-in subsidy? All else equal, shouldn't a rational consumer choose the console with the largest built-in subsidy?
Yeah dumbass, that's what happens. That's why people buy electronics instead of food, right? Oh wait, there's that thing called marginal utility. All things being equal, they would choose the cheapest console. Even if things aren't equal, which they're not, people buy things based on their utility within their budget line.
Sony and Microsoft are giving us free hardware when they sell each console at a loss. A gamer who wants the most computing power for his buck will naturally prefer the subsidized console, ceteris paribus. Whether this is ultimately healthy for Microsoft and Sony is another matter entirely. The ultimate profitability of a game manufacturer is no concern of ours, as gamers.
Yeah, the console is free. That's why you paid money for it, right? It's not that it's at a rate lower than its production cost or anything, it's free and my wallet just opened up and the money ran out. Again, people puchase within income restraints dependent on their marginal utlity. If the Ps3 was $60, but they hate Sony games, then it doesn't matter. If you could buy a super computer for 2 million dollars that's been subsidized by 200 million, would you? Get out your credit card, because by your logic you'd be a fool not to!
Also, Stop using the term "subsidy", because it's not. It's a

ing loss. If it were subsidized, someone would be paying them the extra $300 to sell their system at such a loss, and the last time I checked no one's doing that. The loss can be technically subsidized by software sales or microtransactions, but the amount would have to be greater than or equal to the loss, and with initial sales there's no subsidy and there's NO guarantee the lost revenue can be covered in the future (see Xbox division). In the way this is being used, it's incorrect and clearly something this person googled to try and sound smart.
One final point: if a company doesn't believe in its product enough to take a small loss at launch, what does this risk averseness say about executive confidence in the long-run prospects of the product? A larger, up-front investment indicates stronger confidence that a product will eventually be successful enough to pay for initial investment.
So, because a company wants to make a profit they have no confidence in their product? By your logic, shit everywhere should be dirt cheap. The Ps3 should only be $25. I mean, they're confident in it right?
Most comments below are ignoring the ceteris paribus stipulation of the argument. For this argument to work, one must assume that all else is equal. To put it another way, would you buy a Wii at $600 or at $100? You'd buy it at $100, because the $600 model is exactly the same. Most rebuttals are bringing in objections that violate the core stipulation.
I don't need to say anything here. The idiocy speaks for itself.
In Summation: Purchasing decisions are made based on utility within a consumer's budget line, not based on the "subsidy" of a product(which is incorrect here. It's not a subsidy, it's a

ing loss, no one is paying them the additional $300 to sell their console at $600). People don't buy things by taking the producer's bottom line into account. This type of baseless idiocy is what happens when people think that since they took introduction to MicroEconomics for a quarter and they remember what CETERIS PARIBUS, they're economists.