Video game consoles are routinely sold below cost, and games are sold above cost. What would happen if someone figured out how to use the consoles as cost-effective, general-purpose, nongaming computers?
A) People would buy the consoles as low-cost computers, never buy any games, and the console-maker would lose money.
B) The console maker would make more money since it would sell more consoles.
C) The console maker would lower the price on its consoles to sell more of them to a more elastic market.
D) The price of games would rise.

Question

Quizplus · Accepted Answer

If consoles are used as general-purpose computers, people might buy them without purchasing games, leading to losses for the console-maker since consoles are sold below cost and profits are made from game sales.

Video Game Consoles Are Routinely Sold Below Cost, and Games