>the customer gets more value out of the modded device, which means more sales to the device vendor. Not sure about the modern xbox, but a lot of game consoles

>the customer gets more value out of the modded device, which means more sales to the device vendor. Not sure about the modern xbox, but a lot of game consoles have traditionally been sold at a loss with the expectation of making it up on game licensing fees. Making more sales at a loss without a significant enough increase in licensing revenue equals a bigger loss. And that's before accounting for the higher support costs of people with incompatible 3rd-party hardware calling Xbox support.