Right idea, wroooooong pricing.
Yes physical media is now on the upswing again. But it doesn't get a novelty surcharge like a fucking current gen lineup.
You make it like 100, 200 and 500 you're going to get way more gross sales. I can't imagine inputs are very high for this, at all.
If I was them, I'd push hard with this with better pricing, and then work on a modern physical console with gameplay as the focus and graphics as the lowest priority.
That's how you bring back the golden age of gaming.