Why You Can't Buy A 360 168
Slate Magazine is running a story about the difficulties of finding an Xbox 360 this holiday season. They explore the reasons behind the console shortage, and have some ruminations on Microsoft's motives. From the article: "So, supply shortages are a fact of life. The puzzle is somewhere else: Why don't companies raise prices when supply is short and demand is frenzied? Leaving aside oxygen and a few other essentials, there is no such thing as an absolute shortage of anything: There is only a shortage if the price is too low. At the moment, Microsoft is easily selling out the half-million or so Xbox 360 units (there's no official number) for prices starting at $300 for the basic package. Why doesn't Microsoft price them at $700 instead?"
Supply vs. demand (Score:5, Interesting)
Besides, the idea behind selling consoles is not to make money. The real money is made on games. The console needs to go to the people who will buy the most games, which are also the people most eager to wait in line at Best Buy all night to grab a 360.
Over analysis (Score:3, Interesting)
Price controls (Score:2, Interesting)
Doesn't matter if it's gas (Carter), grain (18th c. France), or Xboxes, if the market thinks X and the price is set at X-something, there will be a shortage.
OK, so there's a shortage. So what? Xboxes are not energy or food. There's no particular harm done, other than to MS's immediate profit, by underpricing the 360.
Maybe MS has decided that the revenue from higher-priced XBoxes is more than offset by the cost in bad publicity when the market price drops by half by spring. Maybe they realize the value of being the hot item instead of Cabbage Patch dolls this year.
There are other forces at work besides the next quarter's earning report. A console system isn't a one-time revenue stream like a loaf of bread or a gallon of gas. The Slate writer is right in his assessment, but also short-sighted.
Maybe it is just where I live... (Score:3, Interesting)
Re:Jeebus (Score:3, Interesting)
Comment removed (Score:3, Interesting)
Re:No need to beat around the bush (Score:2, Interesting)
How would you feel if you paid $700 for an Xbox in November and then the schmuck down the street picks it up for $300 2 months later? You'd likely see it as MS gouging its loyalest fans for a quick buck and catering to the common crowd once your wallets were tapped.