| scat398 said: @drkholer that's not really the way consumption and spending work when doing a High end loss leader. The concept is to get people to spend money they weren't going to spend, and it works. Peole don't move their purchase up, they purchase something they were never going to buy. The concept of a $99 console may or may not work but it's important to understand the concept. |
Look, the basic fact is that Walmart is givng you $100 for every Arcade model they sell (at regular price). Walmart buys its Arcades from MS at a certain margin (and Walmart has very high volume but very low margins on anything, that's their business model). If you use your $100 giftcard to buy $100 of potatoes, Walmart does not get a single cent for the potatoes, they lose $(100-margin of their potatoes), or probably around $90-$95 for every Arcade sold.
Reportedly in this thread, Walmart gets more shipments in of Arcades every following day so I seriously doubt that MS does not play along in this firesale (MS knows they can cash in later on way overpriced accessories - apart from stock allocation considerations). There is a limit of money Walmart can throw out the window. And I still think this firesale is partially preempting Xmas period sales.










