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http://blogs.mercurynews.com/aei/200..._sales__1.html
As you can see from this article, MSFT is losing about $153 per Xbox360. Why? Because they are creating a market for their video games. Just an example that companies will manipulate markets for their benefit. I'm not saying that the practice should be stopped or regulated. But pretending it doesn't occur is silly.
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Sounds like consumers are benefitting, too.