| archbrix said: @bolded: That's where I would argue that the PS3 was not overpriced, just too expensive to be competitive. Again, two different things. I don't necessarily consider sales to be the ultimate objective metric in determining whether or not something is overpriced. Not always, at least. The PS3 was not strictly limited to just a games machine. It was a blu-ray player the year that the media format launched. Stand-alone blu-ray players in 2006 ranged from around $799 to Sony's own $999 player - highly marked up and very overpriced. But the PS3 being $599 for a cutting-edge console and a player of a brand new format (and an excellent one at that - by far the fastest player on the market at loading discs at the time) was not overpriced at all. In fact, it was a bona fide steal. To me, that's a lot of value for $599, despite the fact that none of the earlier games interested me and that I had no intention of buying it until it came down to $400. Personally, I loved the Wii and the value matched the price for me but for someone with little interest in Nintendo's games, $250 for a slightly faster Gamecube with new controllers could be seen as overpriced. So while the value of the games catalogue is certainly important - even paramount - I don't consider it wrong for one to say that the PS3 gave you more bang for your buck. Doesn't mean that I didn't value the Wii far, far more in their early years, but as you said, you have to consider other traits as well. The PS5 vs the Xbox Series X is a case where Microsoft literally devalued its console by taking away exclusivity. To a diehard Xbox fan though, maybe there is equal value there when you consider that some people just like a specific controller/online experience/ecosystem and perhaps have zero interest in Sony's exclusives. Most people would certainly opt to buy a PS5 because now you get Microsoft's exclusives too, as long as you're ok with a console that looks stupid. Another good example is the PS5 Pro; probably not overpriced based on the tech, but definitely way too expensive for me based on the perks you get over the base model. |
Rol's quoting the neoclassical/subjective theory of value. This marginally explains how the market operates, but only just. Nintendo's own pricing policy for software contradicts his statement. If a game sells poorly at $60, one would expect the logical move to be lowering the price to $50, $40, $30, or any amount that might drive more revenue. So why doesn't Nintendo do that? Because it creates the perception that you can simply sit down and wait for discounts
Nintendo is willing to accept smaller profits on niche titles that may sell 1-2 million copies, if that means maximizing profits on major hits like Mario Kart or Animal Crossing. This is because buying habits aren't defined solely by subjective perceptions of value they're intrinsically behavioral. Why does a publisher like EA sell its games at bargain bin prices or even give them away? Because they expect a small percentage of those players to impulse-buy microtransactions or cosmetic items
Behavioral economics can also help explain demand for consoles. When the PS3 was released consumers expected the price to drop over time, so there was less urgency to buy one early. In contrast, the PS5's price increased over time, which may cause people to rush to buy the PS6 at launch assuming that early adopters are likely to pay less than those who wait
