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sc94597 on 23 April 2015
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Dunban67 said:
sc94597 said:
Dunban67 said:
sc94597 said:

The issue with this is that we don't know how much the current purchasers value the Wii U. It could very well be the case that if XBO stayed at $500 or $400 that it would do Wii U level sales, and if the Wii U were priced (it was close with $350) that much the direhard Nintendo fans who are currently buying the Wii U would still purchase it. In that scenario, as unlikely as it is, both the XBO and Wii U have the same number of people who value it at the high price, and therefore the same value. Again, value is dependent on the individual purchasers. The XBO/Wii U could possibly have some people who value it more at different prices. If both the XBO/Wii U were at $250 you can't say that the XBO will certainly have more people who value it than the Wii U, beause it is quite possible that people planning to purchase a Wii U just can't afford $300 and that is why $250 is the most they are willing to pay for it. On the otherhand people who value the XBO might possibly be able to afford $300 and therefore any gains from a price-cut might be less. So it isn't as simple as, "XBO has more powerful and therefore - pricy - components and therefore it is more valuable." 


 You are reaching and ignoring the facts-  but you get an "A" for effort

Please enlighten me. You had a good argument there! Wait nevermind, I don't take economic lessons from someone who can't distinguish economic value from market price.

Edit: For those who are interested, to illustrate my point with a graph.

 

I agree that value is intrinsic to the consumer and not manufacturing cost (see the launch for the PS3)-    Even if an individual consumer is willing to pay more for a Wii U( IF they had to)  than an X box One-,  they would not do so becausae THEY WOULD NOT NEED TO- if a person who preferred a Wii U could either buy an X box One or a Wi U for $200 they would buy the X box one if for no other reason than to sell it for a profit and put it toward a Wii U  (granted if money was not an issue for the individual they may not go to the trouble for convinience reasons or the value of their own time-  but most people (that prefered a Wii U) would  take the $100-$200 profit they could get for the X box  and essentially get an even beter value on their Wii U

The consumer ultimatly sets the value and no mass product (if any product) is priced at the exact terminal value all current purhcasers are willing to pay at that time - that would be impossible to accomplish -    individually what we personally  value a product is not meaningful to anone else  with rare exception  (unless your dealing w a con artist )

Either way-  I now give you an A+ for effort due to your nice grapgh

The assumption made is that the market price is the same for the XBO and the Wii U. If both the Wii U and XBO had $200 market prices (decided by Microsoft/Nintendo) the original comment I quoted said that Nintendo should not assume that the Wii U will have an equivalent value (it is less valuable) and thus should drop its price. Nobody can sell an XBO for more than a Wii U in this situation unless there is a shortage of XBO's, because Microsoft themselves are selling it for $200. So if I were only willing to buy a Wii U and I had no interest in XBO (because, for example, I have a Gaming PC which plays XBO's best games) then it doesn't matter that the XBO is $200 and has better hardware, I want a Wii U for its unique games. Hence, the correct phrase to use to describe the original posters dillema is "greater quantity demanded" not "more valuable." At $300 the XBO might have more people who choose to value it at said price so that the demand is greater than the Wii U's. At $200 the Wii U might have more people who value it at said price and are willing to purchase it than XBO. Thus, the XBO is not more valuable, nor is the Wii U (unless you contextualize it by a demographic), it has more total quantity demanded. 

Value is price and time dependent, and based on the perception and preferences of the consumer(s) the product targets. 

edit: My point is that lower prices can bring  in consumers who weren't evaluating any consoles at the higher prices. And higher prices can remove consumers who were evaluating at the lower prices.