> In 2006, at the time of PS3’s launch, each console was sold at a loss of around US $240 per console

That would be a loss leader if the plan was you sell those launch consoles and then exit or move on to a new product having lost $240 per console.

But that was never the plan, the plan was you sell millions more consoles over many years and so overall they're profitable.

It's not razors and razor blades, Gillette sent me a free razor when I was a teenager because that's a razors and razor blades model. Sony doesn't give away consoles because they make money selling the console. They didn't make money on the first few million, which doesn't matter because they sold over a hundred million after that.

The reason they don't do razors and razor blades is because the attachment rate is much lower than most owners imagine unlike for razor blades. It's typically going to be 5-6 games per console. PS4 actually hit 8 games per console but that's a fantastically successful machine nearing the end of its life.

So, if you're losing $240 per console but you hope you can shift six games per console that is $40 per game you need to recoup to break even.

If you go out to a third party developer and you say "We want $40 per sale" they are going to laugh in your face. This isn't Apple strong-arming independent developers, the big games publishers (most obviously Take Two and Activision) absolutely are powerful enough to walk away from such a deal knowing that their competitors will do the same and then the console is dead.