Every console dies.
As a gamer, you should just get used to the harsh reality of those three words. Even though video game hardware production is a business that is dynamic by nature, there is one feature that remains static.
Every console dies.
But why is this true? Why is it that after you plunk down over $300 dollars for a Dreamcast, an extra controller, a VMU and Sonic Adventures on 9-9-99, less than two years later, you're getting the shaft? Why is it that you're so unlucky? Well, if it's any consolation, you're not the only one. Regardless of this fact, is there a reason for all of this madness? The answer is a definite, "errah, wellI'm not sure."
As I see it, there is a factor in the console-death equation that is not evaluated by most. That factor is "Japanese Pop Culture". I have a friend who lived in Japan for 2 years. When he came home to see his folks, he'd tell me all about the Akihabara district. All of the bleeding-edge technology in Japan can be found there, ready to be bought and sold by the public.
One interesting facet of the Japanese people was their technology preferences. My friend said nobody, but nobody, walked around with a portable CD player. Everyone used Mini-Disk. Keep in mind that this was in 1997. Mini-Disk technology was available here in the United States, but it was selling worse than ***********. He'd tell me how the Japanese, on the average, prefer having only the newest and best technology. That's just part of the culture. In Japan, no one wants to have old technology. This includes that little box that sits in your entertainment center.
Since almost all of our video game consoles, at least, the ones that are worth a crap, (have you read our X-Box article?) come from the Land of the Rising Sun, they become outdated within a few years. This is fine with all of our friends across the Pacific, but what about those of us here in the good ol' U.S. of A.?
Americans, as a general rule, resist change. We like things to stay the same for as close to an infinite period of time. Look at how long it's taken for DVD players to become mainstream. Even now, some people still don't understand why DVD is better than VHS. So, when Joe Average American plunks down $200 for his NES, he expects it to be supported for at least the next 20 years. However, Yoshi Average-san sees it in a totally different light. And guess who the executives at Nintendo and Sony are using as a benchmark.
In the end, what can a hard working guy or gal do? Here are a few pointers from your friend psikoalpha.

>Get used to it! There isn't much we can do but accept the fact that we're second billing to Japanese culture, even though we make up around 60% of the home video game market. As I mentioned before, the sooner you accept the fact that the console you bought today will be old tech five years from now, the happier you'll be.
>Buy late in the game. If you can stand to wait, sit it out for a few months (or years) before making the plunge. Video game hardware is priced high initially to ease the loss of production values until software sales make up for those losses. After a year or so, the company can afford to nearly give their system away because of the revenue generated from software sales. (As a side note, did you know that the cost of manufacturing one X-Box is approximately $425, yet retail will be $300? If you want to screw Micro$oft, buy their console, but don't buy any software or accessories!)
>Don't sell your system at a garage sale. There are lots of games available on any given system. Just because your Genesis isn't seeing any new software doesn't mean there are no more good games for it. Keep your old console and look out for games that you never had a chance to play, or games you didn't want to pay $50 bucks for. Now, you can pick up tons of those old-skool games for around five bucks. At best, leave it around for when your friends show up. Everyone coming over to my house craps their pants with nostalgic glee when they see my NES and SNES still sitting on my coffee table.

So, now you know why this awful thing happens and what you can do to prevent it. Do you have some input? Hit me up at asdf@asdf.com and let me know where you're comin' from.
-psikoalpha