Why is sony so stupid? If the market is willing to pay $3000 for a console...

[BD2003]

Originally posted by: VTHodge
The answer (if you were looking for one) is because of bad publicity. A companies reputation is worth more than the extra profit that they would make by selling the first ~500 units at those prices.

Exactly. Think about how sore they would be.

OTOH, I wouldn't be as nearly as opposed if Sony were to actually auction off the first ten thousand themselves a week before general release, and donate a good chunk of it to charity. That way the idiots who gotta have it first no matter the price can do so, some of it will go to a good cause, and there won't be as much of a glut from scalpers on ebay.

That would be excellent publicity IMO, and would kill two birds with one stone.

 

[otispunkmeyer]

because then people would pay 5000 for them

 

[uhohs]

msrp of $2500 = instant seppuku = lol funnies

 

[Canai]

Originally posted by: j00fek
consoles costing >$300 = worthlessly stupid

ficksed

 

[waggy]

economics basics

Hey OP read this. this is a good basic reason WHY they can't sell it for for $2500

 

[KrillBee]

here's what I think. the 500-600 should be a MSRP,
meaning that stores can choose to sell it for higher if they want. Then by the time that enough PS3s are being shipped, the price can drop down to 500-600.

wouldnt that work?

 

[EKKC]

Originally posted by: Canai

Originally posted by: j00fek
consoles costing >$300 = worthlessly stupid

ficksed

wii FTW then
i got my reservation from TRU yesterday thanks largely to their unannounced preordering scheme

 

[DrPizza]

I think everyone's missing something else... The short term shortage is creating a TON of publicity for the PS3... "OMG, It's so wonderful that people are camping out for days in advance... people are paying thousands of dollars for one on ebay..." That's going to ultimately boost the demand for PS3's in the long run. Smart move by Sony.


Remember that little company called "Ty"? They made beanie babies? They created artificial shortages, or rather, had a lot of "rare" releases (what made the releases so rare? The company had complete control over how many of any particular type they released.) Then, they had "retired" beanie babies. End result: people went nuts buying and selling the idiotic things. Did Ty raise the prices? No. But their marketing genious ended up selling 1000 times more than they probably would have otherwise sold.

 

[giantpinkbunnyhead]

Originally posted by: PlatinumGold

Originally posted by: giantpinkbunnyhead
I say they should sell it at some wildly inflated price for the first 48 hours or whatever, and then bump it down to a normal price. Obviously, people are paying well over MSRP for these things at first... I'd rather Sony grab that extra money than ebay flippers. At least sony might re-invest some of it.

what do you think Ebay flippers do with that money? bury it in the ground?

they spend it and they spread it around.

i'd rather a couple of hundred (mb even couple of thousand) individual americans flip them and spend the money locally than it go to Sony.

I dont know about you, but if I owned a company that was selling something for far less than people were willing to pay for it, I'd raise my damn prices. I'd change them as the demand changes. On November 17th, the PS3s will be fetching thousands on ebay, and I believe Sony is stupid for not cashing in on it while they can. If they have to lower the price again on November 20, fine. Granted, they've got 400,000 units that are going to sell out in an hour. While maybe 1,000 will get ebay'd. Sony could never retail them for $2500 but I would bet they'd still sell out, on day one, at $999 a pop. Extra $1.6 million right there. If it was my company, I'd want that money... but that's just me.

 

[Nerva]

why are you so ignorant? the high price right now originates from arbs who's taking advantages of the temporary high demand.

 

[PlatinumGold]

Originally posted by: giantpinkbunnyhead

Originally posted by: PlatinumGold

Originally posted by: giantpinkbunnyhead
I say they should sell it at some wildly inflated price for the first 48 hours or whatever, and then bump it down to a normal price. Obviously, people are paying well over MSRP for these things at first... I'd rather Sony grab that extra money than ebay flippers. At least sony might re-invest some of it.

what do you think Ebay flippers do with that money? bury it in the ground?

they spend it and they spread it around.

i'd rather a couple of hundred (mb even couple of thousand) individual americans flip them and spend the money locally than it go to Sony.

I dont know about you, but if I owned a company that was selling something for far less than people were willing to pay for it, I'd raise my damn prices. I'd change them as the demand changes. On November 17th, the PS3s will be fetching thousands on ebay, and I believe Sony is stupid for not cashing in on it while they can. If they have to lower the price again on November 20, fine. Granted, they've got 400,000 units that are going to sell out in an hour. While maybe 1,000 will get ebay'd. Sony could never retail them for $2500 but I would bet they'd still sell out, on day one, at $999 a pop. Extra $1.6 million right there. If it was my company, I'd want that money... but that's just me.

my response to questions of why sony doesn't sell their PS3 at a higher price at intro is in another thread, but i'll restate it here if you like, selling a console is NOT like selling a video card, sure you can release the latest and greatest video card and retail it for 5x what it will sell in less than 1/2 a year but the video card IS the source of income for the video card company. it's simply NOT true with Consoles. with consoles you have to sell accessories and games both of which bring in higher profits than the console itself. if you retail it too high than you risk losing revenue on the games and accessories portion for a long time (it can reduce long term demand even if you have a scaling price). plus they will probably have agreements in place with those that wrote the games that limit how much they can get for the console itself. face it, a console with no games is worth absolutely nothing.

why risk the larger profits on accessories, their games, licensing for game writers for a small temporary profit?

only because you are short sighted.

 

[Fritzo]

Only like 1000 people in the country would pay that much. That's why.

 

[Slew Foot]

Consoles are kinda like printers and cell phones. The profit is not in the unit itself (which is why you can get them for free or dirt cheap), but is in the ink/monthly minutes/software. You want as many people to have the unit as possible, because when they have the unit, they have no choice but to buy accessories and games which is where you can slowly bleed them over time. And believe me, if what's being leaked about GT3 (having to pay extra for tracks and cars), Sony's planning on a LOT of nickel and diming.

 

[UncleWai]

They don't give a rat's ass about profiting from the console. The important thing for Sony is to secure their market position and then rips people off on games.
Price discrimination will get so much bad rep that people will just go over to other consoles.

 

[kuqdew]

Wat do you expect when the PS3 is about to release

 

[mugs]

Originally posted by: lokiju

Originally posted by: neovan
because the ebayers will then be able to ebay them for $10K

Sad but true.

No it's not. The prices on eBay represent what people are willing to pay for it. If people were willing to pay $10k, the eBay prices would go higher. How much you can sell something for has nothing to do with how much it cost you.

The reason they don't do it is bad press. I think they should do it anyway. They could justify it by making the launch day systems "Limited Edition" PS3s and say that they'll be collector's items someday. Maybe a different colored case and add something inconsequential to distinguish it. That would probably help deflect some criticism, because they could be up front about the price not being permanent. I'd rather see Sony get the profits for all they've invested in research and development than some loser who was willing to spend a week waiting outside Best Buy.

Or they could plan ahead and release the console when they're able to supply enough units to meet demand. And while they're sitting around twiddling their thumbs, maybe beta test it?

 

[DrPizza]

Originally posted by: mugs

Originally posted by: lokiju

Originally posted by: neovan
because the ebayers will then be able to ebay them for $10K

Sad but true.

No it's not. The prices on eBay represent what people are willing to pay for it. If people were willing to pay $10k, the eBay prices would go higher. How much you can sell something for has nothing to do with how much it cost you.

The reason they don't do it is bad press. I think they should do it anyway. They could justify it by making the launch day systems "Limited Edition" PS3s and say that they'll be collector's items someday. Maybe a different colored case and add something inconsequential to distinguish it. That would probably help deflect some criticism, because they could be up front about the price not being permanent. I'd rather see Sony get the profits for all they've invested in research and development than some loser who was willing to spend a week waiting outside Best Buy.

Or they could plan ahead and release the console when they're able to supply enough units to meet demand. And while they're sitting around twiddling their thumbs, maybe beta test it?

Look at all the free publicity they're getting by being unable to meet demand... And, all the hype about the demand simply serves to create additional demand. When something's scarce, people think they need it.

 

[PlatinumGold]

Originally posted by: DrPizza

Originally posted by: mugs

Originally posted by: lokiju

Originally posted by: neovan
because the ebayers will then be able to ebay them for $10K

Sad but true.

No it's not. The prices on eBay represent what people are willing to pay for it. If people were willing to pay $10k, the eBay prices would go higher. How much you can sell something for has nothing to do with how much it cost you.

The reason they don't do it is bad press. I think they should do it anyway. They could justify it by making the launch day systems "Limited Edition" PS3s and say that they'll be collector's items someday. Maybe a different colored case and add something inconsequential to distinguish it. That would probably help deflect some criticism, because they could be up front about the price not being permanent. I'd rather see Sony get the profits for all they've invested in research and development than some loser who was willing to spend a week waiting outside Best Buy.

Or they could plan ahead and release the console when they're able to supply enough units to meet demand. And while they're sitting around twiddling their thumbs, maybe beta test it?

Look at all the free publicity they're getting by being unable to meet demand... And, all the hype about the demand simply serves to create additional demand. When something's scarce, people think they need it.

amazing how many stupid people in this thread think that bad press is a primary motivation.

it is at MOST a secondary by product it is nowhere near being a primary reason for not charging that much for the product.

 

[JS80]

Originally posted by: lokiju

Originally posted by: neovan
because the ebayers will then be able to ebay them for $10K

Sad but true.

you guys fail at economics

 

[JS80]

also, the shortage is pushing up demand because the arbitragers are entering the market to try to get a console. If they priced the unit at ~$999-$1199, I doubt there would be this frenzy.

 

[mugs]

Originally posted by: PlatinumGold

Originally posted by: DrPizza

Originally posted by: mugs

Originally posted by: lokiju

Originally posted by: neovan
because the ebayers will then be able to ebay them for $10K

Sad but true.

No it's not. The prices on eBay represent what people are willing to pay for it. If people were willing to pay $10k, the eBay prices would go higher. How much you can sell something for has nothing to do with how much it cost you.

The reason they don't do it is bad press. I think they should do it anyway. They could justify it by making the launch day systems "Limited Edition" PS3s and say that they'll be collector's items someday. Maybe a different colored case and add something inconsequential to distinguish it. That would probably help deflect some criticism, because they could be up front about the price not being permanent. I'd rather see Sony get the profits for all they've invested in research and development than some loser who was willing to spend a week waiting outside Best Buy.

Or they could plan ahead and release the console when they're able to supply enough units to meet demand. And while they're sitting around twiddling their thumbs, maybe beta test it?

Look at all the free publicity they're getting by being unable to meet demand... And, all the hype about the demand simply serves to create additional demand. When something's scarce, people think they need it.

amazing how many stupid people in this thread think that bad press is a primary motivation.

it is at MOST a secondary by product it is nowhere near being a primary reason for not charging that much for the product.

If you're going to call people stupid, back it up. :roll:

 

[JS80]

lol now that i think about it sony should have sold the first 400k units via dutch auction (like the Google IPO), then release the next 600k for dirt cheap prices to regain consumer goodwill.

 

[KrillBee]

how much do you folks think these things will go for on ebay?

 

[PlatinumGold]

Originally posted by: mugs

Originally posted by: PlatinumGold

Originally posted by: DrPizza

Originally posted by: mugs

Originally posted by: lokiju

Originally posted by: neovan
because the ebayers will then be able to ebay them for $10K

Sad but true.

No it's not. The prices on eBay represent what people are willing to pay for it. If people were willing to pay $10k, the eBay prices would go higher. How much you can sell something for has nothing to do with how much it cost you.

The reason they don't do it is bad press. I think they should do it anyway. They could justify it by making the launch day systems "Limited Edition" PS3s and say that they'll be collector's items someday. Maybe a different colored case and add something inconsequential to distinguish it. That would probably help deflect some criticism, because they could be up front about the price not being permanent. I'd rather see Sony get the profits for all they've invested in research and development than some loser who was willing to spend a week waiting outside Best Buy.

Or they could plan ahead and release the console when they're able to supply enough units to meet demand. And while they're sitting around twiddling their thumbs, maybe beta test it?

Look at all the free publicity they're getting by being unable to meet demand... And, all the hype about the demand simply serves to create additional demand. When something's scarce, people think they need it.

amazing how many stupid people in this thread think that bad press is a primary motivation.

it is at MOST a secondary by product it is nowhere near being a primary reason for not charging that much for the product.

If you're going to call people stupid, back it up. :roll:

are you kidding me? rootkit sony, exploding battery sony, beta sony, etc etc etc. this sony is afraid of a little bad press??

ya right? :roll:

besides, several very plausible and good economic reasons for why sony doesn't do it other than the bad press thing has already been posted in this thread, no need to do it again.