Frog already said most of what I would have but think of the combined launch hardware prices of the 360, PS3, and Wii. There's no benefit for the consumer to have those pieces of hardware separately. 360 and PS3 games are hard to tell apart and the Wii is last gen hardware. It's not like in the 8-bit and 16-bit eras where each console displayed graphics and sound uniquely. I doubt having a standard console would be initially any more expensive than that. And even if it was, time and competition from several manufacturers would lower prices fairly quickly.
And price wars aside, one of the biggest advantages is that hardware companies can't censor content. Can you imagine if your DVD or MP3 player did that? That's what console gaming has been like from the NES onwards. The first-party model holds back artistic expression and people think it's normal.


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