As a Sony fan, I can honestly say that this is one of the worst things I've seen my favourite company do. It's a terrible practice and there's simply no excuse for it as far as I'm concerned.

Microsoft recently raised the price of the XO back from $349 to $399.  Shortly after that, they dropped it back to $349.

That, according to this thread, is wrong and immoral.  All price reductions, it seems, must stack.  It should have been $100 off and every XO price reduction afterwards should be based on the $299 price.  Of course, that would be ridiculous but I'm not the one outraged and I'm certainly under no illusions that I'm entitled to some kind of perpetual discounts rule.

If you don't like a sale, buy it elsewhere.  This is an offering from a private company.  The level of entitlement people exhibit sometimes leaves me amazed.

should they stack promotions? whats wrong here?

This is almost a non-issue: if you don't like the price, don't buy the game. Speak with your wallet. Or wait for the price to come back down again.

Welcome to the digital future

This is why digital is hardly the immediate future on consoles cause otherwise you'd have to play by the gaming industry's rule rather than other retailer's rule ...

Prices can never go back up?  Is that even possible?  Discounts have to be based on discounts?  

I don't get the thread...

It's comparing retail (which are practically ALWAYS cheaper than Digital prices) with the promotion. This part is only applicable if the games were cheaper on PSN prior to the "offer".

However, on top of that, it's actually a very common practice. The same happens whenever Disney do their Buy 1 Get 1 Free offer on DVD and Blu-ray. Films all go up to full RRP while the offer is on. Suddenly individual films are cheaper again once the offer ends.

You can find these games cheaper at retailer but going by the digital prices even with the increase youre still saving like 30-40 bucks.

Whether there is an issue or not depends on what the price was normally.

If they had Game A on sale for $20 but before this promotion, bumped it back up to its normal $40 price, there's nothing wrong with that.

If they had Game A dropped to $20 and before that it was $25 or $30 but they raised it to $40 for the sale, that's a shitty move.

Either way it's probably not an issue. And with digital console prices being so ridiculous, you'll pretty much always be able to find cheaper physical deals online.