While production of larger die sizes should not be an issue for TSMC, the console market is a bad analogy from a cost perspective because of the pricing structure used by console manufacturers. Both Microsoft and Sony sell their consoles at a bare minimum profit, if not an outright loss. For example, the PS5 costs around $450 to manufacture and the XBox Series X costs right around that $500 mark. These companies make the bulk of their revenues off the licensing fees paid by game and peripheral developers, as well as their services such as Game Pass Ultimate (XBox) and Playstation Network. Nintendo also engages in this practice. For retailers such as Best Buy, Target, Gamestop, Walmart, etc. there is no real profit made from the sale of physical media, which is a big reason why digital sales and subscriptions have become increasingly emphasized over the years. This latter reason is why Gamestop has emphasized their used software/hardware business so much over the last several years. Even the base M1 Air probably costs Apple between $700-$850 to build, mainly because of the cost of the screen.
