I think it's been selling alright in Japan, so that's probably why they thought it'd be a good idea. They're also making quite some margin on the device.
I'm still somewhat surprised they did it that way instead of making a low margin device designed to sell cloud subscriptions, but I guess in Japan at least they read the market as wanting just the in-home streaming to sell PS5 consoles with the barrier to entry not being price (so $700 is fine) but just the console itself being connected to a TV they could use.
I think it's been selling alright in Japan, so that's probably why they thought it'd be a good idea. They're also making quite some margin on the device.
I'm still somewhat surprised they did it that way instead of making a low margin device designed to sell cloud subscriptions, but I guess in Japan at least they read the market as wanting just the in-home streaming to sell PS5 consoles with the barrier to entry not being price (so $700 is fine) but just the console itself being connected to a TV they could use.