And things I've read in the past have led me to believe that the tv box will be heavily subsidized, much like cell-phones are for the telecom industry. I don't see that as being a significant part of the cost, though I could certainly be wrong.

Anyway I agree with you that it's costly, but if it can do everything they say, or even most of what they say (yes, I realize it's a rather large "if" I think they'll make money. There's just too much potential in thin-client gaming for anything else.