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How is this "morally bankrupt"? It's just smart. Every business on earth would do this in there sector if they had the chance. What's wrong with a smart and cl

How is this "morally bankrupt"? It's just smart. Every business on earth would do this in there sector if they had the chance. What's wrong with a smart and clever individual buying this to resell at 8x? It's not hurting anyone, it's just a stupid retro console. What's wrong with society? People are struggling and getting screwed over by governments and big business, they badly need income and here is a small opportunity to get a piece of that pie. Ultimately someone that wants the product who is happy to pay the price that it is sold for, because they deem it worth that price, ends up with the product in there life. And someone else manages to profit to, to gain some much needed income so they can purchase something they want in there life. Hardly morally bankrupt. There is no change in the outcome here. There are still the same amount of people with these consoles, enjoying them as before. Nobody is hurt. In fact you could argue that someone doing this is a net gain, because two people gain instead of one. Someone made a profit that wouldn't otherwise and someone got the console they wanted (and obviously didn't care about the price)

eridius 10y ago
> It's not hurting anyone, it's just a stupid retro console. It's hurting the people who are forced to pay $600 for a $60 item because they need one (e.g. a must-have gift for someone). It's hurting the people who wanted to buy one for $60 but cannot afford to buy one for $600. So yeah, it's hurting basically everybody who had any interest in buying the product.
- bunderbunder 10y ago
  If you're being "forced" to pay $600 for a $60 item because you must buy one right now, perhaps you need to stop and question the nature of your relationship with that person. If you are so bothered by having to wait for them to come back onto the market at $60 that it hurts you (as opposed to, say, just being a minor annoyance), perhaps you need to stop and question the nature of your relationship with yourself.
- AndrewKemendo 10y ago
  This argument is ridiculous. Otherwise there would be no such thing as luxury goods.
  - eridius 10y ago
    What does luxury goods have to do with anything? A luxury good isn't a regular good that's simply been marked up 10x.
    - AndrewKemendo 10y ago
      That's very nearly the definition of luxury goods, given changes to elasticity with income, with it being explicitly so for veblen goods.
      - eridius 10y ago
        You can't just take any product, mark it up 10x, and call it a luxury good. People would laugh at you and buy the regular one. A luxury good has to have some reason to justify its luxury status. In this particular case, the $60 NES Classic is already a luxury good. Marking it up 10x doesn't make it more of a luxury good, it just either means people who actually want to use the damn thing can't afford to, or must pay exorbitant prices.
        ctdonath 10y ago
        Sometimes "luxury" is being the first to have something. Some find it worth $540 to have one of the first.
        jonknee 10y ago
        http://www.barneys.com/product/golden-goose-distressed-superstar-sneakers-504100295.html http://www.barneys.com/product/golden-goose-distressed-super... You would be surprised.
        andrewem 10y ago
- derefr 10y ago
  I don't agree that arbitrage hurts consumers (in most cases.) As I said in my sibling comment, arbitrage hurts producers—but it tends to help consumers. If you assume that a good is finite by definition (e.g. a concert ticket), then arbitrage helps the good reach the people who value it the most. Imagine a world where all concert tickets, no matter where in the stadium they are, cost $60. Imagine that there is no such thing as arbitrage. Obviously, in such a world, the tickets for the best seats will sell out first, since they're the most valuable. But they won't necessarily be well-allocated; they might be sold to people who don't actually care much about where they sit. Now, introduce arbitrage (i.e. scalpers.) Suddenly, the tickets for the good seats, that are worth more than $60, are able to have that information built into their price. Now people who value seeing the concert from the best seats at $120, won't lose out to people who only valued those same seats at $60, but happened to get there first. The people who are willing to pay $120, of course, might just be twice as rich, and therefore have about the same utility calculus as the people willing to spend $60 (i.e. it doesn't matter which of the two get the ticket.) But assuming two people with the same income, the one who is willing to pay more should get the ticket. They're willing to trade more of their happiness for it, so it probably will make them more happy. --- In the case of something like concert tickets, the way to fix this is for the producer themselves to price things at the prices the market will bear, such that they serve the role for the market that scalpers would do otherwise. To soak up all the arbitrage-able value themselves. But in cases that aren't like concert tickets—and consumer electronics certainly qualifies—the "right thing to do" is to just make more of the thing. Scalpers don't exist when a company is relying on unit economics of profit margins for their total profits, and will gladly up supply to meet demand (and will also attempt to predict initial demand, and bring initial supply online so as to meet that as well.) Companies can choose not to do this, of course. Mainly, companies avoid doing this because their profits aren't built around unit economics. Neither Prada bags nor Magic: The Gathering "legendary" cards are produced to meet demand; they're instead produced to be fought over. But if the company does build their profits on unit economics, then that leaves you with two options for why they're 'underproducing': either they have to, because they have a tight logistics pipeline and the product wouldn't be revenue-positive if they made that pipeline "wider" for the sake of higher initial production (as happens with each new iPhone); or they're just doing it to have some of the "cachet" of the collector's items rub off on them. In both cases arbitrage will necessarily happen. In the first case, the company themselves are mostly blameless. In the second, it's entirely the company's "fault" that people are paying $600. Either way, this arbitrage is still helping consumers—at the expense of the company. But when it's done for cachet, it's certainly a "hoist by their own petard" sort of situation: the company are throwing away money they could have made, and letting scalpers pick it up, all for the sake of signalling (advertising) that they're a classy company (which—if people don't already believe this, they're not likely to start just because of one event like this.) --- Mind you, Nintendo is probably in the former category, not the latter. The production run for the Classic NES is probably on a minimal pipeline, designed to not leave Nintendo with any units left over once the buying is done.
- enneff 10y ago
  > It's hurting the people who are forced to pay $600 for a $60 item because they need one (e.g. a must-have gift for someone). LOL at the privilege of this being a real problem for someone. If we were talking about price gouging on food, medicine, or housing then I might agree with you. But luxury gifts? Come on, man. > It's hurting the people who wanted to buy one for $60 but cannot afford to buy one for $600. LOL at the idea that they can't just wait for them to manufacture more of them. I mean, the games have been out for nearly 30 years now, right?
  - metaphor 10y ago
    > LOL at the idea that they can't just wait for them to manufacture more of them. I mean, the games have been out for nearly 30 years now, right? Assuming more are eventually manufactured, which many hope to be the case...in this instance. On a related personal note roughly 5 years ago, HP released a limited edition of their 15c RPN scientific calculator[1], which promptly sold out and found their way on eBay listing for $100s more. Despite popular demand, HP never manufactured more. I was lucky enough to acquire two units direct from HP at original cost and actively use one--along with a 35s--on a daily basis; the second is a spare that I refuse to part with. The moral bankruptcy manifests in a willingness to acknowledge that this behavior is unacceptable were the product "food, medicine, or housing" or any commodity that is generally classified as a necessity. In my eyes, the principle of the matter cannot discriminate. [1] http://h10010.www1.hp.com/wwpc/pscmisc/vac/us/product_pdfs/15c_data_sheet.pdf http://h10010.www1.hp.com/wwpc/pscmisc/vac/us/product_pdfs/1...
    - mikeash 10y ago
      Why are you blaming scalpers for people's woes with the 15c, rather than blaming HP? I see no problem with having different standards for necessities than for luxuries. We'd consider it morally reprehensible to deny food to a poor person, but few people have a problem denying yachts to a poor person.
      - metaphor 10y ago
        There's a distinct difference between blaming scalpers for a general shortage of supply and holding them accountable for detestable profiteering behavior. The point of bringing up the 15c instance was to highlight the apparent assumption that manufacturer supply always trend consumer demand. A large portion of the user community knew in advance that the 15c would be limited release...but so did scalpers as hundreds of units were immediately relisted at super-inflated prices on zero-day. In the end, it's the user community for which the product was intending to target who ultimately loses...which inflames the compromise that I've made in my mind between a legit business incentive to make a fair profit and an underlying hacker ethos. Furthermore, scalpers have nothing invested in the creation of the end-product, nor do they ever intend to use it, nor is there any value added to their super-inflated relist price, nor do they share in the business risk of bring the product to market. Profiteering is their strict modus operandi. Although it's certainly delusional to think that these bad apples could ever be done away with completely, I think it's equally asinine to point fingers at an OEM (who has invested in and owns the IP rights) without having first excercised due diligence in holding scalpers who are demonstrably contributing to the supply problem publicly accountable for their actions, if only on a moral note. The problem becomes even more exacerbated when technology enables independent scalpers to gain critical mass on a scale that can nerf an entire production lot. It's unfortunate that the only real action the public can take is inaction against scalper relists...it's even more unfortunate that real consequences are practically nonexistent. What isn't being acknowledged is the very real risk that any company faces with bringing a hardware product to market at scale. Saturate the market with the intent of deterring scalpers and your unsold investment sits in a storage warehouse costing you untold amounts collecting dust. Increase unit cost on the next product lot and suffer consumer outrage. Set the initial cost beyond reasonable profit and you're in price gouging territory. Assuming a sustainable business model, where's the incentive? Again, it's the user community who ultimately loses to the true vectoralist scalper. The food vs. yacht analogy appears to dismiss reality. In a zero-sum game, the unit cost of a yacht commands a ballpark 6-8 orders of magnitude delta over food. As a society, we indirectly deny poor people yachts on the merit of economic sensibility, not because it's a social luxury; simply replace yacht with a scaleable luxury like cell phone or computer. The notion of an alternative "affordable yacht" is an oxymoron and subjectively exclusive to the wealthy.
- ctdonath 10y ago
  A thing is worth what another is willing to pay for it. Nobody needs it to survive. Nobody must give it to someone else. Those who find it worth $600 have the opportunity to buy one, rather than not getting one because they sold out too fast. And there's nothing stopping Nintendo from making more until everyone willing to buy it at $60 (if only to turn around and resell it for 10x) gets one. I'm tempted to call this a "0th world problem". It's a game. You'll live without it, or at least until you can buy one for list price. Heck, wait a little longer and you can get one for $10.
- jimmies 10y ago
  Oh no, I'm so sorry to hear that you're hurt! Where does it hurt with regard to your feelings? In the mean time, you can remedy the hurt with an SD card, and a Raspberry Pi Zero that you could buy at the nearest MicroCenter for the price of 0.99 and half an hour of loading RetroPie on it.
- nommm-nommm 10y ago
  This thing is a gimmick, just download the games you want to play on Wii's virtual console.
derefr 10y ago
Market arbitrage is 'wrong' insofar as, if someone "deems [the product] worth that price", then the compensation for the created value should go to the people who created that value. To do otherwise is to deprive the market of the signalling tokens (dollars) it uses to propagate information about what things there should be more of, back to the people who make things. The ultimate arbitrage, after all, is communism, where a central actor soaks up all the profits, and then is left with the responsibility of figuring out who should make more of what themselves, because hell if the producers know.
- mikeash 10y ago
  The only people depriving the market of the signaling tokens are the sellers charging an price where they know that demand will far outstrip their ability to supply the product. The market way to handle a small supply of a popular product is to charge a high price, so that purchases equal production. All the compensation goes to the people who created the value, and the people who value the product the most are the ones who are able to obtain it. Of course, Nintendo doesn't want to charge $1,200 (or whatever) for this product, because it would make people upset. So they set an artificially low price and deal with shortages for a while. Or maybe the shortages are a feature, driving demand through perceived social pressure. They're certainly allowed to do that. But that's Nintendo screwing with the market and trying to defy economics. Arbitrageurs are just putting things back the way they would naturally be. Note how companies and industries which are not afraid to charge high prices for products in high demand rarely suffer from scalpers.
ferdbold 10y ago
We're not talking about "smart and clever individuals" here. We're talking about scalper bots gaming the system by buying all of the product literally seconds after the seller flipped the switch. This isn't fair for the consumer at all as the product has literally been taken hostage by some third-party with unfair advantage. It's the 21st century equivalent to plundering trade routes. Also, I don't think the nature of the product has any influence on the morals of the practice, I find it despicable no matter what is being sold.
- bitJericho 10y ago
  Plundering? You think Nintendo doesn't get their cut. Back in the age of discovery these types of products would sell for their actual, top end value period. The distributors never got a say.
- Jommi 10y ago
  There is no plundering happening here. Nobody is streaming anything, everyone has made their decision. Nintendo for some reason sold a too low quantity, and now the price is high, as denoted by Basic Economics. Its not like this was free money for the scalpers, they took a risk and estimates the demand for the product. Now people who want it the most, can get it. Those who dont want it that mucj, dont get it. Its absolutely logical, and in no way immoral.

eridius 10y ago

> It's not hurting anyone, it's just a stupid retro console. It's hurting the people who are forced to pay $600 for a $60 item because they need one (e.g. a must-have gift for someone). It's hurting the people who wanted to buy one for $60 but cannot afford to buy one for $600. So yeah, it's hurting basically everybody who had any interest in buying the product.

bunderbunder 10y ago
If you're being "forced" to pay $600 for a $60 item because you must buy one right now, perhaps you need to stop and question the nature of your relationship with that person. If you are so bothered by having to wait for them to come back onto the market at $60 that it hurts you (as opposed to, say, just being a minor annoyance), perhaps you need to stop and question the nature of your relationship with yourself.
AndrewKemendo 10y ago
This argument is ridiculous. Otherwise there would be no such thing as luxury goods.
- eridius 10y ago
  What does luxury goods have to do with anything? A luxury good isn't a regular good that's simply been marked up 10x.
  - AndrewKemendo 10y ago
    That's very nearly the definition of luxury goods, given changes to elasticity with income, with it being explicitly so for veblen goods.
    - eridius 10y ago
      You can't just take any product, mark it up 10x, and call it a luxury good. People would laugh at you and buy the regular one. A luxury good has to have some reason to justify its luxury status. In this particular case, the $60 NES Classic is already a luxury good. Marking it up 10x doesn't make it more of a luxury good, it just either means people who actually want to use the damn thing can't afford to, or must pay exorbitant prices.
      - ctdonath 10y ago
        Sometimes "luxury" is being the first to have something. Some find it worth $540 to have one of the first.
      - jonknee 10y ago
        http://www.barneys.com/product/golden-goose-distressed-superstar-sneakers-504100295.html http://www.barneys.com/product/golden-goose-distressed-super... You would be surprised.
        andrewem 10y ago
derefr 10y ago
I don't agree that arbitrage hurts consumers (in most cases.) As I said in my sibling comment, arbitrage hurts producers—but it tends to help consumers. If you assume that a good is finite by definition (e.g. a concert ticket), then arbitrage helps the good reach the people who value it the most. Imagine a world where all concert tickets, no matter where in the stadium they are, cost $60. Imagine that there is no such thing as arbitrage. Obviously, in such a world, the tickets for the best seats will sell out first, since they're the most valuable. But they won't necessarily be well-allocated; they might be sold to people who don't actually care much about where they sit. Now, introduce arbitrage (i.e. scalpers.) Suddenly, the tickets for the good seats, that are worth more than $60, are able to have that information built into their price. Now people who value seeing the concert from the best seats at $120, won't lose out to people who only valued those same seats at $60, but happened to get there first. The people who are willing to pay $120, of course, might just be twice as rich, and therefore have about the same utility calculus as the people willing to spend $60 (i.e. it doesn't matter which of the two get the ticket.) But assuming two people with the same income, the one who is willing to pay more should get the ticket. They're willing to trade more of their happiness for it, so it probably will make them more happy. --- In the case of something like concert tickets, the way to fix this is for the producer themselves to price things at the prices the market will bear, such that they serve the role for the market that scalpers would do otherwise. To soak up all the arbitrage-able value themselves. But in cases that aren't like concert tickets—and consumer electronics certainly qualifies—the "right thing to do" is to just make more of the thing. Scalpers don't exist when a company is relying on unit economics of profit margins for their total profits, and will gladly up supply to meet demand (and will also attempt to predict initial demand, and bring initial supply online so as to meet that as well.) Companies can choose not to do this, of course. Mainly, companies avoid doing this because their profits aren't built around unit economics. Neither Prada bags nor Magic: The Gathering "legendary" cards are produced to meet demand; they're instead produced to be fought over. But if the company does build their profits on unit economics, then that leaves you with two options for why they're 'underproducing': either they have to, because they have a tight logistics pipeline and the product wouldn't be revenue-positive if they made that pipeline "wider" for the sake of higher initial production (as happens with each new iPhone); or they're just doing it to have some of the "cachet" of the collector's items rub off on them. In both cases arbitrage will necessarily happen. In the first case, the company themselves are mostly blameless. In the second, it's entirely the company's "fault" that people are paying $600. Either way, this arbitrage is still helping consumers—at the expense of the company. But when it's done for cachet, it's certainly a "hoist by their own petard" sort of situation: the company are throwing away money they could have made, and letting scalpers pick it up, all for the sake of signalling (advertising) that they're a classy company (which—if people don't already believe this, they're not likely to start just because of one event like this.) --- Mind you, Nintendo is probably in the former category, not the latter. The production run for the Classic NES is probably on a minimal pipeline, designed to not leave Nintendo with any units left over once the buying is done.
enneff 10y ago
> It's hurting the people who are forced to pay $600 for a $60 item because they need one (e.g. a must-have gift for someone). LOL at the privilege of this being a real problem for someone. If we were talking about price gouging on food, medicine, or housing then I might agree with you. But luxury gifts? Come on, man. > It's hurting the people who wanted to buy one for $60 but cannot afford to buy one for $600. LOL at the idea that they can't just wait for them to manufacture more of them. I mean, the games have been out for nearly 30 years now, right?
- metaphor 10y ago
  > LOL at the idea that they can't just wait for them to manufacture more of them. I mean, the games have been out for nearly 30 years now, right? Assuming more are eventually manufactured, which many hope to be the case...in this instance. On a related personal note roughly 5 years ago, HP released a limited edition of their 15c RPN scientific calculator[1], which promptly sold out and found their way on eBay listing for $100s more. Despite popular demand, HP never manufactured more. I was lucky enough to acquire two units direct from HP at original cost and actively use one--along with a 35s--on a daily basis; the second is a spare that I refuse to part with. The moral bankruptcy manifests in a willingness to acknowledge that this behavior is unacceptable were the product "food, medicine, or housing" or any commodity that is generally classified as a necessity. In my eyes, the principle of the matter cannot discriminate. [1] http://h10010.www1.hp.com/wwpc/pscmisc/vac/us/product_pdfs/15c_data_sheet.pdf http://h10010.www1.hp.com/wwpc/pscmisc/vac/us/product_pdfs/1...
  - mikeash 10y ago
    Why are you blaming scalpers for people's woes with the 15c, rather than blaming HP? I see no problem with having different standards for necessities than for luxuries. We'd consider it morally reprehensible to deny food to a poor person, but few people have a problem denying yachts to a poor person.
    - metaphor 10y ago
      There's a distinct difference between blaming scalpers for a general shortage of supply and holding them accountable for detestable profiteering behavior. The point of bringing up the 15c instance was to highlight the apparent assumption that manufacturer supply always trend consumer demand. A large portion of the user community knew in advance that the 15c would be limited release...but so did scalpers as hundreds of units were immediately relisted at super-inflated prices on zero-day. In the end, it's the user community for which the product was intending to target who ultimately loses...which inflames the compromise that I've made in my mind between a legit business incentive to make a fair profit and an underlying hacker ethos. Furthermore, scalpers have nothing invested in the creation of the end-product, nor do they ever intend to use it, nor is there any value added to their super-inflated relist price, nor do they share in the business risk of bring the product to market. Profiteering is their strict modus operandi. Although it's certainly delusional to think that these bad apples could ever be done away with completely, I think it's equally asinine to point fingers at an OEM (who has invested in and owns the IP rights) without having first excercised due diligence in holding scalpers who are demonstrably contributing to the supply problem publicly accountable for their actions, if only on a moral note. The problem becomes even more exacerbated when technology enables independent scalpers to gain critical mass on a scale that can nerf an entire production lot. It's unfortunate that the only real action the public can take is inaction against scalper relists...it's even more unfortunate that real consequences are practically nonexistent. What isn't being acknowledged is the very real risk that any company faces with bringing a hardware product to market at scale. Saturate the market with the intent of deterring scalpers and your unsold investment sits in a storage warehouse costing you untold amounts collecting dust. Increase unit cost on the next product lot and suffer consumer outrage. Set the initial cost beyond reasonable profit and you're in price gouging territory. Assuming a sustainable business model, where's the incentive? Again, it's the user community who ultimately loses to the true vectoralist scalper. The food vs. yacht analogy appears to dismiss reality. In a zero-sum game, the unit cost of a yacht commands a ballpark 6-8 orders of magnitude delta over food. As a society, we indirectly deny poor people yachts on the merit of economic sensibility, not because it's a social luxury; simply replace yacht with a scaleable luxury like cell phone or computer. The notion of an alternative "affordable yacht" is an oxymoron and subjectively exclusive to the wealthy.
ctdonath 10y ago
A thing is worth what another is willing to pay for it. Nobody needs it to survive. Nobody must give it to someone else. Those who find it worth $600 have the opportunity to buy one, rather than not getting one because they sold out too fast. And there's nothing stopping Nintendo from making more until everyone willing to buy it at $60 (if only to turn around and resell it for 10x) gets one. I'm tempted to call this a "0th world problem". It's a game. You'll live without it, or at least until you can buy one for list price. Heck, wait a little longer and you can get one for $10.
jimmies 10y ago
Oh no, I'm so sorry to hear that you're hurt! Where does it hurt with regard to your feelings? In the mean time, you can remedy the hurt with an SD card, and a Raspberry Pi Zero that you could buy at the nearest MicroCenter for the price of 0.99 and half an hour of loading RetroPie on it.
nommm-nommm 10y ago
This thing is a gimmick, just download the games you want to play on Wii's virtual console.

derefr 10y ago

Market arbitrage is 'wrong' insofar as, if someone "deems [the product] worth that price", then the compensation for the created value should go to the people who created that value. To do otherwise is to deprive the market of the signalling tokens (dollars) it uses to propagate information about what things there should be more of, back to the people who make things. The ultimate arbitrage, after all, is communism, where a central actor soaks up all the profits, and then is left with the responsibility of figuring out who should make more of what themselves, because hell if the producers know.

mikeash 10y ago
The only people depriving the market of the signaling tokens are the sellers charging an price where they know that demand will far outstrip their ability to supply the product. The market way to handle a small supply of a popular product is to charge a high price, so that purchases equal production. All the compensation goes to the people who created the value, and the people who value the product the most are the ones who are able to obtain it. Of course, Nintendo doesn't want to charge $1,200 (or whatever) for this product, because it would make people upset. So they set an artificially low price and deal with shortages for a while. Or maybe the shortages are a feature, driving demand through perceived social pressure. They're certainly allowed to do that. But that's Nintendo screwing with the market and trying to defy economics. Arbitrageurs are just putting things back the way they would naturally be. Note how companies and industries which are not afraid to charge high prices for products in high demand rarely suffer from scalpers.

ferdbold 10y ago

We're not talking about "smart and clever individuals" here. We're talking about scalper bots gaming the system by buying all of the product literally seconds after the seller flipped the switch. This isn't fair for the consumer at all as the product has literally been taken hostage by some third-party with unfair advantage. It's the 21st century equivalent to plundering trade routes. Also, I don't think the nature of the product has any influence on the morals of the practice, I find it despicable no matter what is being sold.

bitJericho 10y ago
Plundering? You think Nintendo doesn't get their cut. Back in the age of discovery these types of products would sell for their actual, top end value period. The distributors never got a say.
Jommi 10y ago
There is no plundering happening here. Nobody is streaming anything, everyone has made their decision. Nintendo for some reason sold a too low quantity, and now the price is high, as denoted by Basic Economics. Its not like this was free money for the scalpers, they took a risk and estimates the demand for the product. Now people who want it the most, can get it. Those who dont want it that mucj, dont get it. Its absolutely logical, and in no way immoral.