tag:blogger.com,1999:blog-19346366.post5660521662894462999..comments2024-03-28T21:56:51.675-04:00Comments on Face to Face: And you thought the PlayStation 3 was expensive...agnostichttp://www.blogger.com/profile/12967177967469961883noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-19346366.post-75163185340770069252009-07-15T00:19:39.582-04:002009-07-15T00:19:39.582-04:00I have mentioned this elsewhere but large companie...I have mentioned this elsewhere but large companies often use pricing consultants to help set prices. All the major airlines use consultants. They develop specific models to determine how much they can charge before demand drops and how much profit they can make by balancing demand and price. If you can only make 50,000 units per month, then all you need to know is the max you can charge and still sell 49,999 units leaving no unmet demand. Obviously it gets more complicated the more factors you add in. Pricing too low leaves unmet demand and lowers profits while annoying willing customers who run to the competition, and so on and so on.sgnoreply@blogger.comtag:blogger.com,1999:blog-19346366.post-68035368272371105622009-07-14T00:45:29.082-04:002009-07-14T00:45:29.082-04:00But then that's no psychological barrier at al...But then that's no psychological barrier at all, if it nearly doubles in 5 years -- our brains didn't change that much that quickly.<br /><br />It is probably the companies testing the waters to see whether or not the consumers do have a ceiling, and with each increase in nominal price that doesn't result in a defection of consumers, they figure that there is no psychological ceiling, and can keep their prices more in tune with inflation.agnostichttps://www.blogger.com/profile/12967177967469961883noreply@blogger.comtag:blogger.com,1999:blog-19346366.post-26106241869008961422009-07-14T00:38:19.143-04:002009-07-14T00:38:19.143-04:00There seems to be a psychological barrier of $300 ...There seems to be a psychological barrier of $300 until about 1990, and $500 from about 1994, with very few consoles selling for more.Anthonyhttps://www.blogger.com/profile/12389602137217799305noreply@blogger.comtag:blogger.com,1999:blog-19346366.post-16647918497382020332009-07-13T14:47:02.541-04:002009-07-13T14:47:02.541-04:00I don't think the 80's Nintendo price cont...I don't think the 80's Nintendo price contradicts monopoly. Nintendo ran on a razor/razorblade strategy. The sold consoles cheap and made serious money selling games.<br /><br />Also, it's possible they had large market share because of low console price. Stores had Segas, Nintendo couldn't charge much more than Sega.robnoreply@blogger.comtag:blogger.com,1999:blog-19346366.post-63343567605760319222009-07-13T13:41:13.133-04:002009-07-13T13:41:13.133-04:00I doubt that legacies are that strong. It's no...I doubt that legacies are that strong. It's not as if Sony's popular series haven't been around for 10 - 15 years -- that's a long time in video games. Conversely, all of the major series from the pre-Nintendo era failed to survive 10 - 15 years later on any system, including Atari's many attempts at consoles.<br /><br />Here's a finding from a recent article on how superstar software influences sales of the hardware:<br /><br />"Original<br />superstars increase hardware unit sales by 12% (146,000<br />units), while superstar sequels increase hardware unit sales<br />by 16% (192,000 units). We can reject that both the cumulative<br />original superstar effect and the cumulative superstar<br />sequel effect are equal to zero. However, we cannot reject<br />that these two cumulative effects are statistically equal to<br />each other. Therefore, we cannot confirm either of the two<br />theoretical rationales."<br /><br />The generations all seem to be about 4 - 5 years, so I don't see that Nintendo was stretching out how long the NES lasted. When I say 1991 as the upper bound, I mean that that's when the Genesis finally made progress against the Super Nintendo.<br /><br />I'm trying to find better data on the actual games, but here's a sample of real prices (in 2007 dollars) of super popular games through time:<br /><br />Pac Man, Atari, 1982: $79<br /><br />Street Fighter 2, SNES, 1992: $102<br /><br />Kirby's Adventure, NES, 1993: $57<br /><br />Zelda Ocarina of Time, N64, 1998: $76<br /><br />Resident Evil 4, GameCube, 2005: $53<br /><br />Halo 3, Xbox 360, 2007: $60agnostichttps://www.blogger.com/profile/12967177967469961883noreply@blogger.comtag:blogger.com,1999:blog-19346366.post-86290247858572078672009-07-13T13:06:38.425-04:002009-07-13T13:06:38.425-04:00Not to give you extra work, but does the same hold...Not to give you extra work, but does the same hold true for the price of the individual games themselves? $60 seems exorbitant, but it might just be that today it would be MY money, not Dad's. <br /><br />Thanks.Parxhttps://www.blogger.com/profile/07197427958028140167noreply@blogger.comtag:blogger.com,1999:blog-19346366.post-41778263277634426612009-07-13T10:39:25.393-04:002009-07-13T10:39:25.393-04:00I wonder if the lack-of-competition / low-price dy...I wonder if the lack-of-competition / low-price dynamic shows up in the innovation side of the equation: 1986-1991 is like two generations of regular computers. If innovation drives prices -- you can't charge more for the same old system (but via inflation you are forced to charge less) -- but you can charge more for a new system.<br /><br />But without competition (and reasonably low inflation) a company might delay releasing innovations in order to milk every drop of profit from the current console.MikeWebkisthttps://www.blogger.com/profile/00763958901731786910noreply@blogger.comtag:blogger.com,1999:blog-19346366.post-70721997791723205492009-07-13T07:44:05.813-04:002009-07-13T07:44:05.813-04:00The thing about Nintendo is despite their fluid ma...The thing about Nintendo is despite their fluid marketshare numbers, they're not about the hardcore gamer market. This was evidenced most strongly with the Wii, which is marketed as the console for the casual gamer/family segment. Keeping their prices relatively low helps accomplish this. They also have the benefit of some very strong legacy titles such as Zelda, Metroid, and Mario anything, which have been around for more than 20+ years.Unknownhttps://www.blogger.com/profile/10425728100475273305noreply@blogger.com