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[Thomas Beckett <thomas AT tbeckett.com>]

Joe Reid wrote:
> Buy an X-Box, Microsoft is selling them at a loss.

        That's called "penetration pricing".  They figure that (almost) every
Xbox unit they sell is one sale that Sony or Nintendo don't get.  And
every Xbox sold is a customer captured for the games/software that work
only on Xbox, and for which MS gets a licensing fee for every unit
sold.  And every Xbox sold contributes to the network externalities
among consumers that increase the value of the next Xbox waiting to be
sold.  MS is built on network externalities ("the value of a network
increases geometrically with the number of members in the network" more
or less).  

        So buying an Xbox because you're against Microsoft and you want to
subtract a few pennies from Microsoft's bottom line is counterproductive
in the long run, because MS stands to gain much more if you buy it.  

TaB