I'm going to go out on a limb here, and say that their simulation model is not very robust :-D My best attempt out of 5 gave me $20.7G in profit vs. -$300M for

I'm going to go out on a limb here, and say that their simulation model is not very robust :-D My best attempt out of 5 gave me $20.7G in profit vs. -$300M for the competitor. This was with selling consoles at cost, a 90% royalty rate, and subsidizing 20 games / year. Taking that to the logical conclusion with a 100% royalty rate only got me to $18G, though maybe that could have been tweaked a bit. This is obviously absurd. Maybe it's representative of a console that allows no third party development. That's unlikely to be a winning strategy in the real world.