Nintendo tends not to sell their consoles at a loss. People criticize them for using older hardware but they make a profit on every unit sold plus their first party titles drive the console sales to a large degree.
If Microsoft and Sony could no longer take a cut of all software sales like Apple does, they’d simply be forced to adapt their business model, perhaps to something similar to Nintendo’s. Gamers would either have to pay full price for modern hardware (less volume discounts) or otherwise settle for older parts. Microsoft and Sony would have to focus a lot more on bringing top developers in-house with exclusive publishing contracts. Life would go on.
If Microsoft and Sony could no longer take a cut of all software sales like Apple does, they’d simply be forced to adapt their business model, perhaps to something similar to Nintendo’s. Gamers would either have to pay full price for modern hardware (less volume discounts) or otherwise settle for older parts. Microsoft and Sony would have to focus a lot more on bringing top developers in-house with exclusive publishing contracts. Life would go on.