Did Sony Profit from the Walmart $100 Discount?

[Bodhesatva]

Mifely said:
LOL @ many.

Raise your hand if you think the word "SALE" must mean that the retailer is losing money overall, or someone paid them to do it!

Raise your hand if you think "SALE" is about the discounted item(s)!

Raise your hand if you think Sony/MS/Nintendo make more money off hardware than software!

Raise your hand if you think games are a low-margin item at the retail level!


...if you raised your hand, or even are remotely unclear on those items, I think you should seriously consider not posting to the sales board, because you are... really misinformed.

The very idea that Sony had any part in this Wal-mart giftcard deal is... ludicrous. I find myself (as usual, on many of these topics), doubting how many of your understand anything about retail, Wal-mart (go look for some books... try: Author, Sam Walton, in the local bookstore, or library, for starts), or occasionally even basic mathematics.

I apologize if anyone is insulted by this post... but some of you are *really* off base, and I figure someone needs to tell you, before you... I dunno, get hit by a bus, in the financial sense... like get an ARM loan for a new home or something.

Sigh, so wrong. The key problem here is that game hardware is an amazingly low margin product. Your assumption about profit margins with loss-leading hardware is spectacularly wrong.

Do you know how much money TRU pays for a 399.99 PS3? 399.98. Until the end of a lifecycle, retailers traditionally make 1 penny on loss-producing hardware like the PS3. Software is a different story, which is why there are random deals at all varying stores going on all the time.

The suggestion that Sony is not involved in this sale is ludicrous. I would recommend you read (or take) economics courses -- even basic ones at the college level. Or, I recommend you work at a retailer like Wal Mart. Either would likely allow for greater insight into these sorts of concerns.

Again, who has the greatest marginal benefit here? Clearly it is Sony, by a wide margin. Wal Mart gains little. Stand alone Blu Ray manufacturers gain some, but not nearly as much as Sony. All of them will take a part of this hit, but unless you'd like to turn traditional economic models upside down, the party with the greatest marginal benefit shoulders the largest marginal cost.