[bgertonson]

This was covered in the post, but under the heading of "Undoing the effect of cancelations"

> Undo the effect of cancellations through up-sells/upgrades. Salesforce.com and ZenDesk charge more for every person you add, and more per person when you increase the features in your plan. Their customers grow (on average). Thus, their revenue over four years is not 4R, but rather it might be R on the first year, 1.5R on the second, 2R on the third, etc., so perhaps 7R in four years.

MS, Sony, and Nintendo hope that once you have the console, you will continue to buy games. And the console maker will collect a license fee from each game sold. If MS bought a ton of PS3 consoles, then the general public would have to buy a lot more games to make up for the loss. So the strategy does work, but it would work against any of the companies, not just Sony. But I think the PS3 had one of the biggest losses of any console at $240 - $300 depending on the version of the console purchased.

[rdl]

Also, somehow keeping your competitor's console from being available to real buyers will dramatically reduce the sales of actual games, since all of the sold-at-a-loss consoles will be sitting in a warehouse somewhere.

The really sneaky thing would be to figure out some non-game thing to do with the "enemy" consoles, like turning them into a supercomputer, or scrapping for parts, or whatever.