. Blade Runner, I Am Legend and many, many more! Why Do Consoles Sell Out?
An interesting article at 1up.com which discusses the phenomena of console launch and its limited supply and huge demand. So get your self a deposit money and go reserve PS3 at a local retailer.
If you remember your basic economics, you should remember this: that in a free market society there shouldn’t be such thing as a massive sellout. Right? You know how it works - supply and demand; when demand is greater than supply, as it is for the Xbox 360 in North America right now, then economic theory says that prices should go up until there’s a balance. And indeed that’s what we see in free-er marketplaces like Ebay, where last week the Xbox 360 was selling for between $500 and $1000.
Most of us can figure out why Microsoft doesn’t supply - they can’t do that in a cost-effective way. So economic theory would suggest that they increase the price. Why haven’t they done that?
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I think consoles sell out so quickly because people get as many preorders as they can, buy them all and sell them on Ebay. After I saw what happened with the Xbox360 that’s what I’m planning on doing.
The coolness factor, overlooked?
(opinion only)
My personal belief is that the demand is hyper inflated by hoarding individuals with the ability to utilize content providers are their low cost distributor. (eb*y etc..)
These independant resellers are inflating the supply. Look on ebay on release date for the xbox more than a plentiful amount that WERE indeed initially purchased at the selling point provided by the initial seller. Microsoft nor the primary distributors made the additional profits from these sales.
Should microsoft say price the xbox at 600 700 or 1000 dollars they would have a serious problem with their ultimate goal in widespread utilization of their console and the profit associated with online subscriptions and software sales.
The individuals willing and with the desposible income to meet the price points are relatively few when compared to the target demographic.
The PS3 must adopt a selling point close to the 360 in my opinion. Should they price themselves too high they risk losing the large base of ps2 fans, to new and used xbox consoles readily available during the coming christmas.
Keep in mind that Microsoft and Sony are battling over HD formats and the “media” center of your home. Sony may be willing to lose tens of millions of dollars on the cost of the console in trade for cementing the blu ray format. Translation, hd format fees. To make an HD dvd and put in your home, sony will reap the small investment it made.