Hence the TV intergration and all the other non-game features. People have shown the ability to support these prices easily with lesser hardware inside a product. Manufacturers outside of Nintendo don't want to sell you a "console" anymore. Outside of PCs, consoles are probably the most powerful device in your home. Its limited utility is not a function of its hardware design, but limited investment in features outside of gaming.
Consoles that only game are about attractive to mainstream consumers as PCs that only game. You couldn't sell 100s of millions of PCs, smartphones and tabs annually if all they did was game. Adding utility is attractive to mainstream as well as core gamers. Furthermore, there are a ton of devices that offer gaming on their platform along with a ton of other features and capabilities that are expanding constantly. How does a console compete employing such an archaic model?
But it this way, you could look at the PS3 as just a console that was highly overpriced at launch. Or the PS3 could be looked at as one of the most powerful and feature rich BluRay player/media boxes ever to exist. Its been available since the launch of BluRay at half to a 1/3rd of the price of other less functional bluray players and today readily competes with other media delivery based CE products even though its 7 years old.
Its odd that segment of the market that invests so much time in consoles and readily makes use of their expanding functionality, is also the same segment that so readily pigeon holes products like 360, ps3, ps4 and One as just consoles. That hasn't been a reality for MS since 2005 and Sony since 1999.
The Wii U is the perfect example of a manufacturer that just wants to sell you a traditional gaming console.
