“It's not the consumers fault that MS is losing money on each XBox sold. That kind of argument doesn't fly with consumers.(awwww, poor multi-billion dollar Microsoft is lost money on this XBox it took me 4 months of saving my allowance to buy). I don't think people should be punished financially (or by invoking the DMCA) for installing non-MS approved software on their XBox, or PlayStation for that matter.”
Scott, you are right that it's not consumer's fault. But I don't think that's the point. Speaking as a consumer who bought his Xbox with his own hard-earned cash, I recognize and appreciate the fact that I paid only $400 (that's Aussie dollars) for it rather than $1000 (or whatever it would have cost me if there was no MS subsidisation). I understand that the only reason I could buy it for that price was that MS and the game developers expect to make money off of me over the life of the product. That's the business model and that's what I bought into when I purchased the product. Not very different conceptually from buying a subsidised mobile phone from a telco and signing up for a two year contract. If you break the contract only a month into the deal, and say “hey, I want to use another provider“, they are going to get annoyed. In the Xbox scenario, MS is the provider you are signing up for when you purchase their subsidized console.
So, although I'm a geek at heart, and I understand the desire to be able to run whatever I want on something I paid for, I also accept there's a bigger picture here. If people screw with the model, it will collapse. MS will stop subsidising consoles. Xbox will close down. There will be no more games. I won't get to play Halo2, 3, 4 or 5. I won't get to live out my geek boy fantasies of fighting online virtual battles against hundreds of rocket-launcher totin' geeks. AND THAT WILL MAKE ME ANGRY. And, trust me, you wouldn't like me when I'm angry. :-)