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78. Re: Newell on Pricing Feb 19, 2009, 15:36 human
 
Milk is not a good analogy for games in a economic analysis. There are about a billion reasons why, but I'll name the three most salient:

1) Milk is usually a basic food in many cultures. It is, therefore, in economic terms, relatively inelastic in its demand curve. People cannot find substitutes for milk and are not as willing to part with milk as prices rise as they are to games. Games, of course, are entertainment, and almost no one would prioritize entertainment over a basic necessity such as food.

2) Production and distribution costs of milk and games are wholly different. In Steam, which is what this thread is about, distribution costs are miniscule compared to the price of the production of the game. In milk, distribution costs are more substantial and more easily influenced by external factors such as the price of fuel, the cost of maintaining trucks, et cetera.

3) There are many producers and distributors of milk in most markets. Steam, as a distribution service, is probably the premier service of its kind. There are very few other online games distribution systems in place that compete with Steam.

All of these factors make your analogy fatuous to the extreme.

I am not making any 'defense' here of Steam. My only point here is that you are a moron and everything you say is laughable. The fact that you think you are some sort of messianic advocate of the consumer, "defending lower prices" makes a good laugh, but that's all.

And who cares if a game costs $65 in your country? Prices of various goods differ widely in different countries. If you are German, you are probably used to paying 2 euros for a döner and 2 euros for a beer, and yet you probably pay 1.5 euros or more for a liter of gasoline and here in the US we pay more for beer and less for gas.

'Defending' these prices (not that anyone can even do such a thing) does not remove the market conditions which make them so. That is not to say new ways of doing things cannot be found, and in fact it looks like Valve are trying these experiments to learn more about this new market, but the way you're going about this subject gives me nothing but lulz.

This comment was edited on Feb 19, 2009, 15:45.
 
 
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