Nintendo infected an already ill industry with one of the biggest threat ever. Now it's paying the consequences of its move.
What's the poin in next gen if it doesn't offer a power quantum leap?
They can provide software updates and new controls systems without make us buy a new console.
The current gen is going to last at least 7 years, probably 8, how can you think about a 600$ console?
it's 7 years! the worls changed a lot from 2005. We have not gaming dedicated smartphones with the capabilities of our home consoles.
Look at the smarphone industry: the top level phone costs around 600$, one year later you can find them second hand to 300$ and new from 400$ and their effective cost is way lower than their price.
Console producers can sell a high spec console to 399$ in the first year with a small margin maybe(Nintendo is selling it's 3ds below cost), it's a fair price.
Then they can earn a lot of money in the following years because they manage to keep the console values: a 7 years old hardware with minor addiction a higly reduced production costs, cost 299$ at best buy. It's only 100$ lower than its launch price.
You don't have to buy the console on day one, you can buy it one year later if you can't afford it, but then, you will have a real next gen console.
I don't want to buy an overpriced old gen console for 250$ on day one that will be my main gaming system for the next 8 years or more.
The thing that next gen implies a huge rise of development costs is a MYTH(partially).
Play a ps2 game, everything changed since then: now the publishers are spending tons of money on motion caputure, professional actors, licensed music and expensive advertising,better artists.
Everything is more polished.
It's true that next gen requires more efforts on some sides of development but on the other side you have new professional tools, lots of middleware, procedural generation and you don't have to write your own engine like years ago.
Also you can share tech and assets with other team if you're part of a big company. Or you can buy them.
This is why now indie teams can create AAA loking games with small budgets.