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MS needed the BR player, which is years late, to provide control over the LR device.

The Blue Ray player is a bundled item which many people don't need. I don't have any Blue Ray Discs, and my DVDs collect dust. Maybe spinning discs aren't currently obsolete, but they are quickly becoming so. If they had a lower cost option with no BR, then they could get the price point way down. (Took me a while to figure out LR meant Living Room.)

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True, but then I don't know if the PS4 price is any more palatable to casual gamers, either -- which is probably why Microsoft initially focused more on non-game features with their first announcement (to show non hardcore gamers that there's something for them, as well).
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Neither system is going to sell to casual gamers, that's my whole point. $400-500 is a big investment in something you aren't going to spend a lot of time on. Adding features to attract non hardcore gamers isn't going to make that $500 price point more appealing any more than adding a stereo system to a boat is going to attract people who don't boat.

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2) Any kid who wants to play games needs to have his own mobile device
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The problem is, many of the people in the XBox's target audience already have a mobile device, or if forced to make a choice, would prefer a mobile device to a console system. If you ask a 12-20 year old which they would rather have, an iPhone or an XBox, I'm pretty sure the iPhone is going to win out 99% of the time. Once they have the iPhone, the AppleTV is a relatively small $99 investment to bring gaming to the TV.

Also worth mentioning that Apple TV runs the same OS as the iPhone and Apple just published design specs for third parties to make controllers, including external, wireless controllers.
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