Someone explain why some software is so expensive

[BigToque]

Why is it that a Full version of WinXP Pro is $349 CDN ($299US?) and Photoshop CS is > $1000?

It's obvious that you need to pay your employees to develop the software and have to make a profit, but there's no way $349 (and $1000) seems reasonable. They must make a killing on every disc sold. How much do you think they make on each sale?

 

[FleshLight]

Development + Publishing + Advertisement - Warez = $$$

 

[BigToque]

Originally posted by: FleshLight
Development + Publishing + Advertisement - Warez = $$$

With the volume they sell, do you think it even comes close (per copy) to what they charge?

 

[Viper GTS]

You think Windows is expensive?

Considering everything it does it is a bargain. Especially OEM, @ <$150. A huge user base = low cost.

Specialty software like PhotoShop ($700) or Autocad ($4,000) is much more expensive because development and support costs are spread across a much smaller user base.

Retail packaging is a minute fraction of software cost.

Viper GTS

 

[KnickNut3]

In regards to Adobe stuff, problem is that their customer base is small. Not too many people need Photoshop, so in order to cover costs they charge a high price.

Since demand is very inelastic in need-specific applications, its marginal revanue curve is very steep intersects 0 at a very small value for x, hence the high price and small output. If they sold at $40 to everyone who wanted it for $40, they would lose tons.

 

[axelfox]

R&D?

 

[Dedpuhl]

Originally posted by: FleshLight
Development + Publishing + Advertisement - Warez = $$$

Some software is insanely expensive cause the target audience is small. For example, High-end Pipe analysis (Civil Engineering) software is currently $12K+. THAT is insane...

 

[n7]

Greed.

What i find so funny is how they charge an insane amount & then wonder why their software gets warezed.

It doesn't take a genius to figure out that if it was sold for a reasonable price, instead of selling 10 items for $1000 each, they could sell 1000 for $100 each.

But of course i must be wrong...

 

[NightCrawler]

Originally posted by: Viper GTS
You think Windows is expensive?

Considering everything it does it is a bargain. Especially OEM, @ <$150. A huge user base = low cost.

Specialty software like PhotoShop ($700) or Autocad ($4,000) is much more expensive because development and support costs are spread across a much smaller user base.

Retail packaging is a minute fraction of software cost.

Viper GTS

Windows should be $50 by now but isn't because there are no market forces to drive the price down. Having another win32 system would change everything.

PS: Those large OEM's buy Windows for $35 a install.

 

[EyeMWing]

Buying retail software is retarded, considering it is almost ALWAYS double the price of OEM. That said, Windows is SLIGHTLY overpriced at the OEM level, but that's just because of asstards like Dell who want to feel special (and Microsoft will assist them in such by cutting them "deals" which in the end come out to be Microsoft keeping normal OEM prices artificially high. Retail prices are artificially high because Microsoft understands their role in the computer industry is to force people to upgrade their f'ing computers to prevent software developers from having to support the Pentium 233's that would be running WinXP is the retail version were affordable. "My computer runs Windows XP, why doesn't your software work!?!?!??!?!" etc.

 

[BigToque]

Originally posted by: Dedpuhl

Originally posted by: FleshLight
Development + Publishing + Advertisement - Warez = $$$

Some software is insanely expensive cause the target audience is small. For example, High-end Pipe analysis (Civil Engineering) software is currently $12K+. THAT is insane...

Well lets use that as an example then... Could it seriously cost them even $1000 per copy?

I understand that these people identified a product that people need and maybe they have the best solution for their users, but is $12,000 justified if it only cost them $1000 (just a random figure) to make.

I'm all for capitalism, but to me something like that just doesn't seem right.

 

[Mo0o]

Originally posted by: n7
Greed.

What i find so funny is how they charge an insane amount & then wonder why their software gets warezed.

It doesn't take a genius to figure out that if it was sold for a reasonable price, instead of selling 10 items for $1000 each, they could sell 1000 for $100 each.

But of course i must be wrong...

I'm pretty sure you are

 

[EyeMWing]

Originally posted by: n7
Greed.

What i find so funny is how they charge an insane amount & then wonder why their software gets warezed.

It doesn't take a genius to figure out that if it was sold for a reasonable price, instead of selling 10 items for $1000 each, they could sell 1000 for $100 each.

But of course i must be wrong...

Yeah, I'd venture to say that 75% of Photoshop sales are lost to warez. However, Elements is helping curb that trend.

Windows, on the other hand, they only lose like 1%, which is INSANELY good

 

[Mo0o]

Originally posted by: Stefan

Originally posted by: Dedpuhl

Originally posted by: FleshLight
Development + Publishing + Advertisement - Warez = $$$

Some software is insanely expensive cause the target audience is small. For example, High-end Pipe analysis (Civil Engineering) software is currently $12K+. THAT is insane...

Well lets use that as an example then... Could it seriously cost them even $1000 per copy?

I understand that these people identified a product that people need and maybe they have the best solution for their users, but is $12,000 justified if it only cost them $1000 (just a random figure) to make.

I'm all for capitalism, but to me something like that just doesn't seem right.

If people are willing to pay for it and they are able to stay afloat then it is "right". They're not denying some 3rd world country humanitarin aid here.

 

[her209]

Originally posted by: Stefan
Well lets use that as an example then... Could it seriously cost them even $1000 per copy?

I understand that these people identified a product that people need and maybe they have the best solution for their users, but is $12,000 justified if it only cost them $1000 (just a random figure) to make.

I'm all for capitalism, but to me something like that just doesn't seem right.

One can argue that another competitor can enter that niche sell a similar product for less.

 

[BigToque]

Originally posted by: Mo0o

Originally posted by: Stefan

Originally posted by: Dedpuhl

Originally posted by: FleshLight
Development + Publishing + Advertisement - Warez = $$$

Some software is insanely expensive cause the target audience is small. For example, High-end Pipe analysis (Civil Engineering) software is currently $12K+. THAT is insane...

Well lets use that as an example then... Could it seriously cost them even $1000 per copy?

I understand that these people identified a product that people need and maybe they have the best solution for their users, but is $12,000 justified if it only cost them $1000 (just a random figure) to make.

I'm all for capitalism, but to me something like that just doesn't seem right.

If people are willing to pay for it and they are able to stay afloat then it is "right". They're not denying some 3rd world country humanitarin aid here.

I guess I don't understand why people would be willing to pay such a high price if they knew it only cost a small percentage of that to make.

 

[EyeMWing]

Originally posted by: Stefan

Originally posted by: Dedpuhl

Originally posted by: FleshLight
Development + Publishing + Advertisement - Warez = $$$

Some software is insanely expensive cause the target audience is small. For example, High-end Pipe analysis (Civil Engineering) software is currently $12K+. THAT is insane...

Well lets use that as an example then... Could it seriously cost them even $1000 per copy?

I understand that these people identified a product that people need and maybe they have the best solution for their users, but is $12,000 justified if it only cost them $1000 (just a random figure) to make.

I'm all for capitalism, but to me something like that just doesn't seem right.

When you're going to be able to sell it to MAYBE 100 civil engineering firms... $12k/copy = $1200k = 10-man dev team working for 2 years @ 60k salary. Nevermind the auxiliary costs, that barely pays for the software to be written and debugged.

 

[BigToque]

Originally posted by: EyeMWing

Originally posted by: Stefan

Originally posted by: Dedpuhl

Originally posted by: FleshLight
Development + Publishing + Advertisement - Warez = $$$

Some software is insanely expensive cause the target audience is small. For example, High-end Pipe analysis (Civil Engineering) software is currently $12K+. THAT is insane...

Well lets use that as an example then... Could it seriously cost them even $1000 per copy?

I understand that these people identified a product that people need and maybe they have the best solution for their users, but is $12,000 justified if it only cost them $1000 (just a random figure) to make.

I'm all for capitalism, but to me something like that just doesn't seem right.

When you're going to be able to sell it to MAYBE 100 civil engineering firms... $12k/copy = $1200k = 10-man dev team working for 2 years @ 60k salary. Nevermind the auxiliary costs, that barely pays for the software to be written and debugged.

In your example, if they only sold 100 copies, they would break even assuming no other costs

 

[LordMorpheus]

Autodesk Inventor Proffessional . . . there be a pricey program.

Autodesk is smart though, and gives it away free to high schools involved in the FIRST robotics program . .

So the kids in HS get used to and grow to like inventor, carry this over to engineering school, and later when the enter the workforce the prefer inventor to its competitors (namely: Solidworks) so the companies they work for are more likely to drop tens of thousands of dollars on inventor licsense than they are on solidworks.


Its win win for everyone but solidworks. I get a free copy of inventor professional, autodesk has me already comfortable using their flagship engineering product, and my university has solidworks at most of the labs so I can play with that too.

 

[KnickNut3]

Originally posted by: n7
Greed.

What i find so funny is how they charge an insane amount & then wonder why their software gets warezed.

It doesn't take a genius to figure out that if it was sold for a reasonable price, instead of selling 10 items for $1000 each, they could sell 1000 for $100 each.

But of course i must be wrong...

If that were the case, they would do it. Every major software company has economists to analyze prospective buyers.

 

[HardcoreRobot]

because the employees it takes to put that stuff together demand the big bucks

because people (esp businesses) will pay that much

because the companies need to turn a profit to stay in business

 

[Antoneo]

I always thought part of the reason why development software (ie. Adobe Graphics Suites, Microsoft's .Net suite, 3D modeling packages) were so expensive was because from them you could make a "finished product" that would be saleable.

 

[phisrow]

One thing to remember about niche software packages used by business is that they don't really have to fear warez nearly as much as software packages designed for home users. Using warez apps for commercial purposes can get you seriously, seriously busted. So the people who need the software professionally pretty much have to buy it. In a way, warez copies of serious applications serve the same function as cheap student versions. People who could never, ever afford the software(so they don't represent lost sales) get to use it, and become familiar with it, so when they grow up and get a job they will buy it. Please note, this does not constitute an endorsement of warez, merely an explaination of why, for example, Valve is much, much touchier about $40 copies of halflife2 than Adobe is about $1000+ copies of Photoshop.

 

[TitanDiddly]

It takes a lot of R&D to make software. Lots of man-hours. It's expensive work to make the base product. Sure they actual product that you recieve costs them little once the program exists. They still have to pay for teh development.

 

[EyeMWing]

Originally posted by: Stefan

Originally posted by: EyeMWing

Originally posted by: Stefan

Originally posted by: Dedpuhl

Originally posted by: FleshLight
Development + Publishing + Advertisement - Warez = $$$

Some software is insanely expensive cause the target audience is small. For example, High-end Pipe analysis (Civil Engineering) software is currently $12K+. THAT is insane...

Well lets use that as an example then... Could it seriously cost them even $1000 per copy?

I understand that these people identified a product that people need and maybe they have the best solution for their users, but is $12,000 justified if it only cost them $1000 (just a random figure) to make.

I'm all for capitalism, but to me something like that just doesn't seem right.

When you're going to be able to sell it to MAYBE 100 civil engineering firms... $12k/copy = $1200k = 10-man dev team working for 2 years @ 60k salary. Nevermind the auxiliary costs, that barely pays for the software to be written and debugged.

In your example, if they only sold 100 copies, they would break even assuming no other costs

Yes, but there's likely not much of a market beyond 100 copies in that example, either. Read the post.