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GoOnKid on 25 April 2020
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Ka-pi96 said:
GoOnKid said:

In regards to the argument about companies going to where the deal is better I want to throw my two cents in. Somebody said that Sony offered a better deal so Square just took the chance and went there. I work in a company that offers products which are quite more expensive than our comepetition. Yet we still sell our stuff. If the argument is made that the customer only goes where the deal is better I'd lose my job, obviously.

The logic that only the best deal is considered is something we all learn in business 101 as the model of demand and offer but in reality it is just that, a model. Long term relationships are often more valuable than simple price and cost factors. How does my company still sell stuff? Because our customers know us and rely on our expertise, and they even know that we are more expensive yet still want to work with us. So ultimately the argument that Square just took the better deal should be doubted, especially in the light of how uch of a partner Nintendo and Square used to be.

That's also part of the deal though. The "best deal" isn't just the cheapest one. Quality is a massive consideration too. A company offering a high quality product at ¥2000 is offering a much better deal than a company offering a crappy product at ¥1500.

Your customers want to work with you because they think you're the better deal, regardless of the fact that you're more expensive.

Yes and that's the thing. If you were a business who would you trust? A company that established a good relationship with you over quite a period of time or another one from a related but dfferent industry that pushed to enter the same market. It was a risky move by Square, no doubt, but in the end it seemed to pay off. However, perhaps it had been possible to not fuck up Nintendo's relationship at the same time. Other companies had parallel relations with Sega for example, so maybe Square would have been able to do as well. It's impossible to tell nowadays, I guess. But turning FF into a Playstation exclusive was definitely risky and backstabbed Nintendo who seemed pretty surprised by this move. What possible reason could have been there for Square to turn to a newby in the playground and go all in with all games from that moment on. One big reason was obviously the money and another the creative freedom. I'm sure both would have been negotiable with Nintendo as well, however.

It's an interesting story and it ultimately lead to the competitive situation we're in today.