Does this logic apply to the handheld market where Nintendo dominated for many generations with Game Boy, Game Boy Color, Game Boy Advance, Nintendo DS, and Nintendo 3DS?
Yup. Look how expensive that ecosystem was. Look how closed and controlled it was. There was no real competition. The PSP forced Nintendo to look at things they didn't care about, graphics, online, whatever. And it was still so fragile that mobile can come in SO quickly with an open system, low pricing, and totally disrupt their empire. I can't wait to see what Nintendo does next i n his space. Hell I'm losing money on that platform but as a gamer, bring on competition and innovation!
Edit:
I'm not replying to anyone trying to spin my conversation into a console wars debate. Why assume I'm talking about any one platform? I've said a million times over 8+ years that I want a diverse, open, competitive and successful industry. Do I touch my Xbox one? Rarely. Do I want it to sell? Of course. Rising tide raises all ships.
Edit: tho I'm not all rosy, there are always things that are no longer sustainable or able to be monetizrd, and some of these devices need to be shot and there players need to come back with something the market responds better to.