TL;DR; Valve proved that new/better does NOT need to cost more. Manufacturers play number games to justify costs or “loss leader” status to placate people.

Valve has PROVEN that you don’t need to pay out the nose for an upgraded device. I REALLY hope people notice this and take companies to task over it. Steam Deck is NOT a loss leader, and I think many times companies (Nintendo, Sony, MS) claim their products are so people don’t look at the pricing too much. I have seen other manufacturers do this, and I suspect the other console manufacturers do this as well… They take the actual cost to produce (parts + manufacturing costs/labor + packaging) and that gives them C. They expect to sell 1 million units over the next two years, and 2 million across the practical life of the produce. Then they take advertising costs A, production costs P and they want to recoup them in the first 100k units. So (A + P)/100k. Let’s not forget the overhead O. Overhead is the peons in the office and support centers, but we’ll spread that over the first year, so O/1M. So we are looking at $200 or so for this widget. NOW we get to the good stuff, the guy who headed the project will get a $500k bonus, and the CEO of course will get a $2M bonus, and we want to make sure we get paid, so we’ll spread that across half of the first year… Just in case it doesn’t go as well as expected. Now we are at $500 for our widget. We will price it at $449 and call it a loss leader since we are “losing money” on it, but we will keep it that price for at least the first year. Then we will refresh it with more efficient manufacturing process and more readily available parts so it is actually cheaper with very little additional development costs, and sell it for $479, and we’ll discount the other one to $399 until we are out of stock.

It’s all a numbers game and how you want to view the numbers, and a large chunk of those costs of course go to the top 3-5 people in the company (this is more prevalent in the US though). I think in Japan the execs make like 10-20x the average for the company, but in the US it’s like 200x.
Ave Ford Salary is $66,000 + $12,000 in Benefits/other compensation
The 4 highest execs made an AVERAGE of just over $13 MILLION in Salary/Benefits/Compensation. So that what 170x ?

I think this would be a great idea as it would allow people to buy the cheaper versions and slowly upgrade their device as they have money. Yeah, by the time they are done it might be a $750 deck, but if it was done over the course of a year it doesn’t feel like it :)