Yes, it is subsidized by the consumables. But for the consumer, there doesn't seem to be any benefit---one way or another the hardware will get payed for, so in expectation you pay as much either way. (Perhaps you could argue that it benefits the consumer by offering a kind of insurance against not finding the product useful, but mostly I think it just prays on some imperfection in human psychology).
Given that this kind of business scheme naturally leads to DRM, I would like to see it banned. Pass a law saying that litter boxes must accept third-party litter. (And phones must be portable between different contracts, and cellphones and Xboxes must be able to run arbitrary software). Then the companies would have to charge the full price up front, and there would be no reason for them to add DRM.
Passing a law seems wildly unnecessary. The market is handling it just fine. People are pissed and buying competitors products instead. There is no shortage of competition.
I think you're crazy on mandating Xbox hardware to run arbitrary software. If you want to do that then just build a PC. Which is something you can do this instant. Demanding fewer options for consumers rather than more requires a spectacular argument which I don't think can be made here.
And passing laws about "kitty litter" just because today's ranting blog post is about kitty litter is a _spectacularly_ bad idea.
The law shouldn't be about specific individual products, but about consumer rights and vendor obligations.
I'd be happy to discuss a law requiring vendors to disclose at point-of-sale any measure taken in a product's design that artificially limits replacing consumables with 3rd party alternatives. Cat litter machines, ink jet printers, coffee makers, razors, cell phones, soda streams - if there's a reasonable assumption that you could buy kitty litter, ink, coffee beans, blades, airtime, or carbon dioxide gas - and _not_ have to buy those from one specific company who sell it at significantly above market rates, vendors should be required to clearly disclose that before the sale takes place.
Laws should solve _classes_ of problems, not instances.
I think a better law would be requiring labeling saying that it is DRM protected and you can only use consumables from the manufacturer. It shouldn't cause any additional cost to the manufacturers. The only harm would be the lost sales from people who don't buy it because it has DRM, which is a good thing in my opinion. It's sort of like how the law that places have to list the calories on menus now, which is a good thing.
Given that this kind of business scheme naturally leads to DRM, I would like to see it banned. Pass a law saying that litter boxes must accept third-party litter. (And phones must be portable between different contracts, and cellphones and Xboxes must be able to run arbitrary software). Then the companies would have to charge the full price up front, and there would be no reason for them to add DRM.