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20. Re: Xbox 360 Dec 16, 2005, 23:41 Parallax Abstraction
 
Futureshop was supposed to be restocked with 10 units per store this morning. I wonder how that went.

Two of the stores that I work with here in Ottawa didn't get any and didn't know about any coming in. Sometimes they get shipments late though.

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19. Re: Xbox Shortage Dec 16, 2005, 23:29 Semantics
 
What if they donated the excess to charity?

 
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18. Re: Xbox Shortage Dec 16, 2005, 23:11 asrof
 
Well I think they want to keep the price "in reach" even if its only in peoples heads. If they set the price at 700 most people would probably say are they serious??? and just forget about it.

This way they get tons of free press, tons of... people dying to get their hands on one... and if CoD2 is the best game out on it I sure as hell can't see why. They are obviously no dummies, the pricing was strategic, and the shortage obviously predictable.


300-400 is normal for consoles isn't it? I thought I remembered playstation being 300, and I guess PS2 probably was at one point... always much better to wait a year or 2, which is a lot easier if you have a PC to play on in the meantime. On the other hand I'm sure a lot of people here paid 200-500 dollars for their graphics card alone, yeah yeah PC does more I don't care, your graphics card probably doesn't.
This comment was edited on Dec 16, 23:13.
 
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17. Re: Xbox Shortage Dec 16, 2005, 19:27 MeatForce
 

how do they figure there wouldn't be any more annoyed customers when nobody but the rich kids were able to get their hands on one?

Hate to break it to yeh, but even at MSRP, nobody but the rich kids are able to get their hands on them.. shortage or no.

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16. Re: Xbox Shortage Dec 16, 2005, 19:21 Scottish Martial Arts
 
I imagine that if Microsoft sold the XBox 360 for $700, it would sell for more than that on Ebay.

Probably not. Buyers ultimately set the price one EBay. Were there a significant number of people willing to spend more then $700 on a 360 we'd be seeing the average Ebay 360 price raise accordingly. Since the price seems to have settled around $700 we now know that that is pretty much the maximum amount of money anyone is willing to spend on a 360, otherwise there would be more auctions going for over $700. Now if Microsoft were to charge $700 that would be the maximum price that Microsoft could charge and still be able to sell all of there 360s.

 
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15. Bah... Dec 16, 2005, 18:55 Syntarsus
 
The Xbox 360: The biggest ado about nothing since the Krispy Kreme.

"it's a fucking DONUT! CONSOLE!"

 
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14. Final Fight :O Dec 16, 2005, 18:34 Charlie_Six
 
Oh man, I'm so glad I bought a PS2 a few months ago. I loved Final Fight arcade and SNES games.  
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13. Re: Xbox Shortage Dec 16, 2005, 16:43 Hezekiah
 
I imagine that if Microsoft sold the XBox 360 for $700, it would sell for more than that on Ebay. Not sure where it would end up, but I bet it would be more than $700.

 
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12. Re: Xbox Shortage Dec 16, 2005, 16:06 Zathrus
 
where Jaguar designed a new car, took a look at how much it cost to make, stuck a markup on it and discovered that it was so affordable they couldn't keep up with production

You've gotta have that wrong... Jaguar making anything affordable? Impossible!

Of course, you didn't say it was reliable... if you'd said that then you'd be sent to a psychiatrist immediately


True story -- a good friend of ours bought a used Jaguar a few years back. He claimed they'd fixed all the reliability problems now that they were owned by Ford (chortle). Well a bit over a year after he bought it it disembowled itself. Literally. The entire electrical system fell out of the bottom and dragged itself behind the car as it rolled to a stop.

Turns out that the genius engineers had designed the electrical system such that the wires and wire connectors were stronger than the wire harnesses. And the alternator had a tendancy to fall out of place. So the alternator fell out and dragged the rest of the electrical wiring with it, snapping cable ties and harnesses as it went.

Oops.

And yes, the car was totalled.

 
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11. Re: Xbox Shortage Dec 16, 2005, 15:55 Scottish Martial Arts
 
All bullshit of course, Bill Gates would be burned in effigy if they'd tried it.

Yeah if they tried it now that's definitely what would happen. Had they priced it higher for the initial launch though it might have been different. Price it at $700 until their production catches up, then start lowering the price on a regular basis. That way they would have avoided the shortage and maximized their profit during the holiday period. As it is now, they've got tonnes of unhappy customers who want to buy a 360 but can't and the 360s that have been sold have been sold at a price far below their value to the consumer.

 
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10. Re: Xbox Shortage Dec 16, 2005, 15:49 The Half Elf
 
Well there is a chance Santa will be delivering money tomorrow and if he does I'm gonna go camp out at a Best Buy for one. Why? Cause I want one dammit!

 
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9. Re: Xbox Shortage Dec 16, 2005, 15:48 Awesome Spume
 
There's a semi-famous example which I won't even pretend to remember accurately from Uni where Jaguar designed a new car, took a look at how much it cost to make, stuck a markup on it and discovered that it was so affordable they couldn't keep up with production. What they did was cover costs rather than maximising profits.

All bullshit of course, Bill Gates would be burned in effigy if they'd tried it.

But how do you feel about the situation in Japan where the console costs less than in the US and only about half the allocation sold.


 
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8. Re: Xbox Shortage Dec 16, 2005, 15:46 Scottish Martial Arts
 
Why would any journalist advocate having a company like Microsoft charge MORE for a product

Because apparently you couldn't read his argument. Right now the XBOX is priced $300 below what people are willing to pay for it. Ebay acts as a perfectly competitive market so we're able to see what the market clearing price for an XBOX 360 is. Most of the 360 Auctions have now centered around a price of $700. Therefore were Microsoft to price the 360 at $700, the quantity demanded would reach an equilibrium with the quantity supplied and there would be no shortage.

The one problem with that argument, as other poster have pointed out, is that raising the price could be perceived as profiteering as opposed to the reasonable economic decision it is. That perception of profiteering could hurt future 360 sales during the later stages of the products life cycle. To what extent there will be a backlash is uncertain, hence why some people are opposed to raising the price and some are.

 
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7. Re: Xbox Shortage Dec 16, 2005, 15:13 nightfend
 
Why would any journalist advocate having a company like Microsoft charge MORE for a product. That is just stupid. Let's see how that journalist would like it if his next Lexus was priced $30,000 more expensive to lessen the demand on it.

I just hate people...going back to my cave now.

 
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6. Xbox 360 Dec 16, 2005, 14:44 ExcessDan
 
Futureshop was supposed to be restocked with 10 units per store this morning. I wonder how that went.

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5. Re: Xbox Shortage Dec 16, 2005, 13:41 Chris
 


With Microsoft's current strategy an XBox360 costs you about $700. Sure, may be able to get one for $400 plus the cost of standing in line for hours, but if you keep it you decline the opportunity to sell it for $700. In effect, it costs $700, full stop, so which people (kids? I bet the median age of consumers of these things is somewhere around 25) get them is not the question. The question is who gets all those $300 increments in price. The author proposes a mechanism which doesn't change the price consumers wind up paying but does change who gets the extra $300. I agree with the first poster that the author probably underestimates the resentment the mechanism might generate, and would add he likely overestimates the revenues at stake. Over the life cycle of the product those increments on the first handful of units won't matter, but consumers have long memories.

This comment was edited on Dec 16, 13:41.
 
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4. Re: Xbox Shortage Dec 16, 2005, 13:41 Scottish Martial Arts
 
how do they figure there wouldn't be any more annoyed customers when nobody but the rich kids were able to get their hands on one?

No one can get there hands on one regardless. What the columnist was advocating was adjusting the price so that the market clears. Yeah most people still won't get a console but those that really value the console will be able to get it. Meanwhile, Microsoft will still get bad publicity but will also be making large profits. Where as right now they're just getting bad publicity for not making enough consoles. Would their be a backlash against the 360 when the price dropped to more affordable levels? Maybe, but I think most people would want their 360 too much to really care.

 
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3. Re: Xbox Shortage Dec 16, 2005, 13:22 VoodooV
 
I do wish people would stop confusing want with need. Short of a promise to a dying child, I cannot think of a "need" here.

a-friggin-men

 
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2. Re: Xbox Shortage Dec 16, 2005, 13:22 asrof
 
I think it's against the law for journalists to say want. Remember, every headline has to sound like a life or death situation now.

The conclusion is stupid, how do they figure there wouldn't be any more annoyed customers when nobody but the rich kids were able to get their hands on one?

 
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1. Xbox Shortage Dec 16, 2005, 12:20 Zathrus
 
Why you can't buy the one present you really need

I do wish people would stop confusing want with need. Short of a promise to a dying child, I cannot think of a "need" here.

And yeah... Tickle Me Elmo, Cabbage Patch Kids, etc... it's all absurd.

But I also disagree with the article's conclusion:

Since at an auction the price is set by the buyers, not the seller, Microsoft could have made a killing, absolutely guilt-free, and created no more annoyed, empty-handed customers than they have with their current strategy.

No, they would've been roundly lambasted for profiteering, creating an artificial shortage, etc. That's not the kind of publicity you want, particularly when you know that the shortage will sort itself out in a few months and you'll be back to trying to keep inventories at a reasonable level. Piss off the consumer too much with strategies like that and they may just decide not to buy your product at all (hi Sony! I'm looking at you).

 
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