Well if consumers dictate prices the WiiU and Vita should have been 50 bucks.

Obviously the companies weren't willing to lose that much money. But in the end not many consumers did buy the devices. So this means they had not enough value for the price. At least in the eyes of most customers.

And well, maybe if the people adding up the prices of components come up that these devices were actually cheap (I am not aware, it is just speculation). But the perceived value of most customers isn't at all the sum of the prices of the components, as nobody manufactures their own gaming device from components. Well, you could say some PC gamers do. But in the end the perceived value often is about things far removed from the components and their technical data.

And shortly after the Wii U launch Nintendo was giving away 3 free games.  I also recall buying a Dreamcast for $50 and 10 games for $5 each....  the market dictated the price.  

Consumers didactic the prices are a lie, or at least a half truth that exists mostly on theoretical level because we all assume all markers are free and competitive 

In the end companies have much more power defining their prices than consumers. We are talking about a oligopoly market with only 3 main console manufacturers, so you either buy one or stop gaming on consoles. 

This indeed goes both aways. With current PS5 demand Sony could very much sell it for 800 USD and I'm sure it would still be sold out because the demand for PS5 is humongous. They won't do it, because they don't want to sell the image PS5 is a too expensive machine so once demands for PS5 start to dry out customers will not see Sony is such good eyes and could purposefully starting to avoid the brand 

In other hand, I'm on the ship Nintendo don't want Switch to be see as "too cheap". OLED could easily be 300 USD and standard and Lite be lowered in price, but they want to keep perception OLED version is a premium version, even if it's not really "that" premium. It's like those digital platinum editions for digital games that barely comes with new content, but are sold like 20-30 USD more expensive because they want buyers to believe they are premium 

Consumers could also buy used or go exclusively retro.  Gaming is a 'want' not a 'need.'  So consumers absolutely dictate prices.  Look at ps5 scalping.  Is the ps5 worth $1,000???  For many the answer is 'yes.'  If consumers didn't dictate price scalping wouldn't exist.

Nintendo is simply selling the Switch at the price consumers are willing to pay.  Those who think it is overpriced, don't buy it.  Nobody is forcing your hand.  

So you just proved it, it's companies who defines prices not customers. Sony is not selling PS5 for 1k USD even if scalpers are selling it for 1k. If you are short minded, they are actually losing money for not selling overpriced hardware which they totally could in current context

Indeed retailers are legally blocked to sell it for the prices they want to, they need to keep hardware prices in line to whatever manufacturers want to. So where is the free market ? Where are the market laws? 

Edit: Indeed, stretching a bit further, scalper grey market is indeed a perfectly free and competitive retail market, barely outlaw of course. There you can see the sellers defining the prices from offer and demand principles lol 

I don't understand how people keep repeating this such economic bogus. Customers could only possible didactic the prices if competition was perfect, this market is already a shared monopoly, there is no remote possibility for economic equilibrium. 

Called it yesterday.

Not at all.  As YOU ALREADY pointed out, Sony could sell the ps5 for $800 for the first year.  But it would damage their brand, which would hurt future sales.  Hence Sony netted out at $500 as the optimal price point based on what is best for their system.  If Sony could sell the ps5 at $800 and not hurt their brand, you **** straight they would.  But consumers wouldn't let a $800 ps5 fly in the market price, so effectively consumers dictated the price at $500.    

Free market is based on sales.  If a product is launched at 'X' price and it doesn't sell, a company will adjust their pricing.  I believe the 3DS is a great example of this.  

Consumers 100% dictate price, always have and always will.  There isn't a monopoly in gaming.  Switch, Xbox Series X, Xbox One, ps5, ps4, mobile games, PC, etc, etc, etc.  

Speaking a bogus economics, "shared monopoly" is about as silly as an argument can get.  There is sony, nintendo, Microsoft and PC.....  there isn't a monopoly.  Each company will sell their products at the highest price the market will allow.  Right now Nintendo is decimating the competition, hence the price of the Switch stays high comparative to the competition.  There is a reason why Xbox One dropped quickly in price and the ps4 didn't.  There are examples beyond examples in the gaming world where consumers clearly dictate price.  

Ask yourself this simply question; if the Switch launched and bombed in the market place, would Nintendo have cut the price?  

*the answer is yes, Nintendo would have price cut the Switch.  But since CONSUMERS bought the Switch and continue to do so, the market is allowing Nintendo to keep the price of the Switch at the original MSRP.  See 3DS or Xbox One for more information.

*Kinect is another example.  MS dropped that like a rock with the Xbox One...  why?  Because consumers mandated it.

?

So we are talking about a supposed force of customers defining prices of products when we only have THREE manufacturers, two of them selling a product for the same prices (MS, Sony) and another one selling another product for lower price but that offer a completely different value proposition 

I think you really misunderstood the concept of supply and demand laws. Prices don't go up in this market because supply is short, they never go, at least not in my memory. They indeed barely need to, as their production costs generally goes down as times goes by, but that's another topic I guess 

The point is, we don't see a significant shift in prices regardless of demand or the lack of it. Compare this with prices for smartphones, launch price is always overpriced and then the prices slowly goes down. That's because smartphone market is far far more competitive, with too much options, models and companies willing to bite a piece of the lionshare 

Console market is hardly the same. We have too few competition, your proposition of gamers going exclusively retro if they want to play games is quite amusing. If we ignore you are trapped trapped play only older and already released games forever. You are also ignoring some companies even fucking clos their digital stores from old systems and find physical copies of some older games can easily turn out to be a nightmare 

You should at least postulate with a more realistic option: If you hate consoles, you can go on PC

That's a much more realistic possibility and indeed it happens although it  assume the consumers are a bit more well versed in components and specs. That's why I think Sony and MS become more lax with their software prices policy but again that's another topic