Picko said:
And yet your argument still doesn't make any sense. No one said it wasn't logical to drop the price of a good. I certainly didn't. I said your argument didn't make sense because it doesn't. Microsoft cannot make itself financially better off by holding back stock, it's mathematically impossible - which is why your point doesn't make sense. For the record, the only time holding back stock makes sense is when you can increase your price substantially due to low supply. Given this doesn't happen with consoles then it never makes any sense.
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Thats a basic rule in economics Picko and while it makes sense, i am thinking about what Nintendo had done. They had a backed up stock and extremely high demand. They kept the price low because with videogames the median price (Safe zone) seems to be $300-399. Anything below that will attract the lower income to middle class whom are the majority of the gaming market. They made sure all stores were sold out for the longest. Microsoft will raise the amount of consoles AFTER the price drop, while they let the anticipation build. This way they can have a smooth 4th quarter. With videogames a back up doesn't hurt a hot item. It actually makes it more appealing, because people can't touch it. Remember as well that they have the timed exclusivity on the hottest JRPG's, so a price drop in September succession to that isn't a bad thing to seal the deal. It's like a one two punch (Kinda like...hmmmm MGS4 and the PS3 price drop?). Giving them enough time to commercialize. I know you don't see the beauty in it, but I do.