Much of the first world is better connected than the US. If you're talking about gamers with both money and poor connections, they're far more likely to be in the US than anywhere else.
South Africa and many countries in Latin America can afford to pay $400 for the console. But they certainly can't count on a >1.5mb/s reliable internet connection.
So yeah, MS screwed the pooch on this one and that will now all be Sony territory.
I'm not going to canvass all Latin American countries, but the median per-capita income for South Africa is about US$500.
Are you unwittingly basing your comment on the standards of the still-privileged White minority, comprising less than 9% of a country of just 53 million?
Having just arrived back from South Africa from visiting my relatives on vacation, I was shocked to find a few highly computer-literate cousins over there who only had a 3G dongle to provide Internet for their entire homes. Another relative had a bandwidth-capped DSL line that was barely faster than ISDN basic rate. Income was not the issue.
Maybe, but Microsoft/Xbox One was not the relevant subject, Steam was.
Am I the only one who actually read the comment I originally replied to?
By the way, even the top 10% of South African households have an average income of just US$15,000, so the actual potential customer base is still smaller than you think.