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The problem with just raising MSRP is that their pricing is far too transparent to do that. The brand damage caused by getting ahead of scalpers would be higher
by kmeisthax 5y ago
The problem with just raising MSRP is that their pricing is far too transparent to do that. The brand damage caused by getting ahead of scalpers would be higher than the consumer surplus taken. Not to mention that, for at least some classes of goods, raising prices in response to demand is considered gouging and prohibited by law. Furthermore, for at least some of these goods[0], using a market-clearing price would actively harm other business goals.
In the example of game consoles, Sony and Microsoft aren't trying to sell you a PS5 or Xbox Series X because it makes them money. In fact, they take a loss on them even in "normal" market conditions. The point of the console is to lock you into a software ecosystem that they can charge developers a 30% tax in order to access.
Most of the money made from selling graphics cards is not by selling individual cards in retail packaging. The DIY and upgrade card markets are actually quite small. Most of the money comes from OEM design wins, system-integrator sales, and so on - markets in which the consumer is buying a fully-functional computer rather than parts.
What seems to have ultimately happened is that companies have used the introduction of new products to set new, higher prices. For example, Apple's 2021 product launches have consistently increased pricing over their replacements from prior years.
[0] notably game consoles, though merchandise like the Tickle Me Elmo would also qualify
- nybble41 5y ago> In the example of game consoles, Sony and Microsoft aren't trying to sell you a PS5 or Xbox Series X because it makes them money. In fact, they take a loss on them even in "normal" market conditions. The point of the console is to lock you into a software ecosystem that they can charge developers a 30% tax in order to access. This is a good argument for producing more consoles, but if there isn't enough supply to clear demand then getting more of the limited stock of consoles into the hands of consumers with less money to spend on gaming is not likely to increase overall spending on the related software.
- brodock 5y ago> Sony and Microsoft aren't trying to sell you a PS5 or Xbox Series X because it makes them money. In fact, they take a loss on them even in "normal" market conditions. And yet, they dont seem to care, as they could have implemented a system to limit one console per account sort of solution. I would bet someone is just "working their KPI" at some level.
- sodality2 5y ago> a system to limit one console per account sort of solution Resellers don't log in before selling, though
- paulryanrogers 5y agoCould be surprisingly tricky to do it well. Perhaps limiting to one per residential household, and it must match the physical billing address?
- spatterIight 5y agoaddress jigging is too easy - - you can add random letters, append 'Blvd', or make up floors/rooms in the case of an actual house
- paulryanrogers 5y agoCredit card processors already have tools to mitigate most of those attacks. Leveraging that should make it much harder. Stores or manufacturers could even send a physical letter ahead of time to further validate. Of course no one wants to wait to buy anything but a few days to get a letter may be preferred to waiting years (like EVGA customers) or paying scalpers.
- wolrah 5y agoMicrosoft kinda tried: https://www.theverge.com/2021/5/11/22430807/microsoft-xbox-series-x-s-xbox-insider-members-pilot-program-scalpers https://www.theverge.com/2021/5/11/22430807/microsoft-xbox-s... I got mine through this program. I don't know if it's still running or how long it ran for, but it was a straightforward system where I had to accept the purchase invitation from my account on my console.