| freedquaker said: In Summary, the game consoles, in real terms, have slightly decreased in price by around 8%, although their relative price has increased up to 4 times as 1996 prices. In plain english, they cost you slightly less now, but much cheaper alternatives have appeared and all of sudden, consoles started to look way more expensive. ------ |
That is assuming video game consoles can be completely subsituted by computers or mobile phones. I'm sure for some people they can be. I think with the size of today's market vs. the market in the fifth generation, and likely with strong income mobility in first and third world countries, the demand curve has become more inelastic than it was in the fifth generation, for that reason. This can counterbalance any change toward a more elastic market from the higher number of close subsitutes. Of course since video game console production is an oligopoly the curves are a little bit more muddy to "assume."
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