this post was submitted on 29 Jun 2023
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PlayStation and Xbox are a small part of two mega-corporations. They have tons of money and capital from the rest of their businesses. So the amount they can invest in their gaming divisions is a matter of choice, rather than circumstances.
Sony is a market leader, largely because of their exclusive games. If this feedback loop as you say were real, Microsoft would be struggling to afford Activision/Blizzard/King due to their 3rd placed console.
Nintendo is the only console maker that has its ability to invest limited by it's market position. That's why all of their consoles are dated on release. They don't have a monopoly on desktop operating systems or a global electronics empire to cover their costs.