Do they mean it's expensive for basically being a somewhat upgraded GameCube?
It's still cheaper than both the X360 and PS3.
Do they mean the X360 is expensive for the hardware they are using??? Possibily. I believe the vid card and processor in the X360 alone is worth the price-tag itself, since M$ is taking a loss on the sales of a X360 system -- though, you'll pay through the nose for the games, as they are $60 a piece. Plus, the 360 is going to make gamers spend more once they introduce the HD-DVD add-on, which I'm sure eventually some MS-published games will be eventually be requiring.....
Sony should NOT be talking -- they're console is just expensive period, since they using a lot new and cutting-edge tech and all, such as the way over-priced Blu-Ray.