I can't say this enough. The business model has to change. Microsoft is going in the right direction and the 360 is proof of that.
It's funny, we all want the best spec'd box at a low price with no restrictions and all of the games. In a perfect world this would happen. The fact is this is an equation to lose money.
Let's start with the box. Microsoft could afford to take a loss on the box early in the cycle due to the revenue Xbox Live was giving them. Think about it If you bought a 360 early in the cycle AND had Xbox live and bought let's say 8 games a year at full or close to full price, you were worth at least $4000 to them, give or take. That's not including any other purchases , accessories, DLC, etc. More than likely, it is more around $6k-10k range.(I am more around the higher end of that)
Sony, without that monthly service, is around at least $500-$1000 less than that on the low end.
Bottom line, it costs a lot of money to provide an online service and Sony at the beginning was not pulling in any money while taking a massive loss on the system.
Mostly everyone on this board is complaining about the not being able to lend games out to a buddy. Well, to be honest, I'm surprised this didn't come up much sooner. The cost to produce and market these games have gone up tremendously. Publishers have been accepting this loss for many years. That and the rise of the used game market has seriously cut into their profits and developers as well as publishers have been hit hard. Look how many have gone under recently. I'm sure they figure that they can't necessarily get rid of both used games AND lending so let's go with the one that hurts us more. LENDING!
The fact is trading in used games for new games does give some revenue to publishers as a new game is being purchased. Lending games to a buddy does not. Therefore make them buy the game.
BTW both Sony and Microsoft have gone on record saying used games WILL continue for both new platforms. The rules may change, but they will be there in some capacity.
Other revenue streams are also important and MS realized that in the middle of the current console cycle. It's smart. It is allowing them to pay for the infrastructure needed to expand it for the upcoming cycle. Sony just realized it a few years ago with PS+.
Things are changing and it really is necessary to adapt. I am a hardcore gamer as well as a realist. I want what everyone else here wants. But I am aware of the business side of things. It had to end sooner or later and its time to suck it up.