$1200 Cheap!

Pinky3 writes: "The LA Times is reporting that Microsoft is encouraging retailers to bundle Microsoft games with each XBox. "Beginning next month, many retailers will be requiring customers to pay from $499 to as much as $1,200 to reserve an Xbox console that, like it or not, will come bundled with games, peripherals and warranties. The reason: Microsoft will provide additional marketing money to merchants that agree to include the software giant's games in their bundles. That's because Microsoft's games carry higher profit margins for the Redmond, Wash., company than those published by third-party companies such as Activision Inc. and Electronic Arts Inc.""

Comments

Ugh...

[CraigoFL]

From the article:

"Loyal Xbox fans will have to dole out hundreds of dollars more than they expected to secure an Xbox," said Geoff Keighley, editor of Gameslice, an online game site.

Loyal Xbox fans? You mean all the ones who bought the previous version of the Xbox and played all the games that came out for it?

Folks, this is really simple: if you don't like the price, then don't buy it! If still you want one, wait a month or two until it drops in price and retailers start selling the base units without all the crap. If you *really* want one and can't wait, then don't complain about getting screwed over.

Game consoles are one area where Microsoft is the newcomer and underdog. They're spending a LOT of money to make sure that the Xbox is a success. If you don't like these sorts of tactics and want them to stop, send them a message by not buying the thing. MS will certainly notice if there's no great demand for their product, despite all their spending on advertising.

Well you're half right.

[Kibo]

But it's not CE based. Operating System: Windows 2000 Kernel, DirectX API
But the Gamecube will support HDTV outta the box, with MS it might be an add-on. Not that I want to help Mario and the Princess pick the most beautiful flowers, so no one crys at the garden party, in HDTV. Still Nintendo...if only I could expect Ikari warriors in stunning HDTV.... Nintendo is what you get when you listen to people who admonish others to "think about the children."

Deja Vu all over again

[generic-man]

On a whim a few weeks ago, I decided to shop around for a Game Boy Advance. Walking around in my local mall, I noticed a bunch of stores had signage up promoting the Advance, but were out of stock. Finally, the EBX had a couple of actual product boxes on display.

Me: Are those Game Boy Advance boxes for real, or are they just boxes?
Salesperson: (very smug) Yes, they're real.
Me: How much?
Salesperson: $200 and up.
Me: (staggered) I'm sorry, what?
Salesperson: Yup. $90 for the Game Boy, plus two games of your choice, plus our accessory kit, plus a two-year extended warranty.
Me: Can I just buy the Game Boy for $90?
Salesperson: No. It's our special package deal.

The following day, I went to a local non-chain place, and they had plenty of Game Boys in stock. I picked one up for $100, no strings attached. Nintendo may not have mandated these "bundles," but just about every chain store latched on.

Don't buy bundles, unless you like to get stuck with all sorts of stuff you don't want.

Re:Deja Vu all over again

[Paul Komarek]

I agree with your assessment that people shouldn't buy things they don't want. However, it oversimplifies reality in many cases. Suppose you want Windows but don't want IE. Good luck. While we don't have a "right" to have Windows, many people find owning a license to operate Windows a necessity. The only reason I can write this without developing ulcers is that I'm not among this group of people.

As for bundling, Microsoft does have a monopoly in the operating systems market (the Supreme Court may reverse this, but it seems unlikely at best). Under United States law, that status puts restrictions on their conduct with respect to the operating systems market (properly defined for PCs, yadda, yadda, yadda). I don't think this XBox bundling issue is relevant, because 1) The XBox isn't really part of the operating systems market in question, no matter what OS it is running, and 2) MS isn't doing the bundling themselves.

However, I think there is an interesting point to be made about an acute failure of capitalism illustrated in this example. Those with the most money are most able to change pulic opinion about their products and competitors' products. I don't believe Adam Smith's "The Invisible Hand" took proper account of this. The closest hint comes from this excerpt:

"Every individual necessarily labours to render the annual revenue of the society as great as he can. He generally neither intends to promote the public interest, nor knows how much he is promoting it...He intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention."

The question then arises, what happens to a person that intentionally subvert public interest for his or her own gain? It is difficult to argue that Corporate America has the public's best interest at heart -- but this wouldn't bother Adam Smith. What I hope would bother Adam Smith is that many companies intentionally act against their customers interests. For example, recall the quote "The customer is the enemy" from the Arthur Daniels Midland case a few years back.

Interestingly, Adam Smith did have something to say about those who use their business deliberately to help public interest:

"I have never known much good done by those who affected to trade for the public good."

So should Microsoft cut the "customers' best interest" crap that they want us to believe, and admit they don't care? Or should the voluntarily put themselves into Adam Smith's catagory of "those who affected to trade for the public good"?

Coming back to my original statement, I believe Adam Smith was grossly naive about how a real market works, where people by stuff because they're told to buy it. After all, we're social creatures trying to harmonize with and improve society. We granted Microsoft the right to do business in our country and in the State of Washington, and I don't think that, as a society, we're reaping rewards proportionate to the privileges granted. Of course no one can say with certainty what things would have been like without Microsoft. My opinion is that we might have gained quality and *useful* innovation at the expense of some progress. And since we'll be here until the cows come home, I don't mind losing a little bit of progress.

-Paul Komarek

Re:Deja Vu all over again

[GroovBird]

First of all; IANAL (who is, anyway?)

In Belgium, it's against the law to bundle something and sell that bundle exclusively. You are allowed to make a special 'package', but if you just want to buy the box and not the games, they can't stop you. It's called 'koppelverkoop' and it goes far.

Oh and don't think this is never enforced.

Dave

Re:Sigh...

[Enigma2175]

When you buy a car, you don't have to add an extra $1000 for the included yacht.

I bought a car recently (10 days ago). No auto dealership in town had the car I wanted. They were either the wrong color (I wanted black), had the wrong options(there were some things I wanted and sone things I could care less about) or had the wrong transmission. Now, I had a choice. I could buy a car that was very close to what I wanted but was on the lot, or I could order exactly what I wanted from the factory. If I ordered from the factory I would pay full list price. If I bought off the lot I would get a $2000 rebate and be able to haggle the price with the dealer. I ended up paying several thousand dollars less by buying a car with MORE options. I got things I didn't want on my original idea of the car, but they didn't cost me anything in the long run(in fact, they saved me money).

Game systems have ALWAYS been bundled with games, back to when video games were invented. The atari 2600, TI, Nintendo, PlayStation, Sega and every other platform I can think of came bundled with games. My pong game came with pong, and the company was audacious enough to not let me play any other games on it! Computer systems also come bundled with software. That does not mean I think it is right, but it is a common business practice, both in automobiles and computing. That said, I think MS is waaaaay off here if they think anybody is going to pay 2 - 4 times the MSRP of the system to have it bundled with a bunch of stupid games. There is an alternative to PCs bundled with software (build your own computer). There most likely will be retailers that forgo the extra marketing money from MS in order to sell the machines unbundled with games. I think a retailer would make more money overall, although I have no way of knowing how much of a marketing allowance MS is providing. If everone else is selling bundled systems for $600 and you are selling an unbundled system for $300 I think you would have many customers.

Re:Nothing New

[linuxpng]

BUT the big difference is that you can buy it by itself http://www.ebgames.com/ebx/categories/products/dep tpage.asp?web_dept=GB+Advance&web_sub_dept=Hardwar e
Don't like it? Don't buy it. It's not like you need a xbox

Re:$1200 is.....MS omnipotent, Don't Think So

[darkPHi3er]

"MS is the type of company who as of right now probably knows within +/- 5% what the demand is, what the poor/average/rich person will pay for it, what the average 'early' adopter will pay for it, and what the average late adopter will pay for it."

WHOA! Duude...here are some "ad hoc" "nonofficial" numbers according to a # of my friends up in Rancho Redmond...BEWARE: YMMV...

1. MS' projected demand for W2K is off by around 30%, much/most of this NOT accounted for by the demand inversion

2. MS' projected demand for W/ME was supposedly off by between 30%-40%, and a large factor that (along with a record number of non-projected support problems) led to its being pulled as part of the Official "Upgrade Path"

3. Deployment of AD is ***OVER*** 50% off projection, and is particularly poor with some of MS' historical "early adopters" and "key partners"

4. Demand for the new WinCe is also reportedly well below projection, though no one's mentioned to me a credible sounding number

5. And let's not forget O2K, where demand is alleged 30%-40% below Worst Case, and by rumour, His Billness and His Steveness got "down and dirty" on the O2K marketing team????

While I have no way of certifying the above numbers, the fact is that MS spokesgeeks have acknowledged the above statements without having provided quantities.

you seem to belong to the "MS is God!" School.

MS has historically (like ALL Tech Companies) always overstated intial demand....Windows95 was the one exception to that, and MS ***HASN'T HAD*** a hit like that since, God, what year was W ***95*** again???...though i've had senior Softies tell me that "for sure" W2K was gonna be...it wasn't, it's been the most disappointing Office release in some time..

"I don't expect MS to make the same low-supply mistakes as Sony"

BONUS ROUND: many industry insiders speculated that the PS2 shortage could have been planned/intentional "market manipulation" by Sony trying to enhance both mid-term PS2 demand and beat the amazing amount of media buzz that "Dreamcast" rec'd...some think it could have also been a way to "Pump Prime" the marker in America and freeze Nintendo/Dreamcast sales for a few months????...

Re:Did you expect any differently?

[Anonymous Coward]

Your memory must be cloudy, because this is wrong. When the NES was originally released, it only included SMB - Duck Hunt wasn't even out yet. Later on, they decided to add the SMB/Duck Hunt pack and the light gun, but the original system with only SMB was still available (at a lower price).

Re:Nothing New

[KentoNET]

First off, it's Advance, not Advanced. Get it right.

Second, Nintendo didn't charge $499-1200 for the GBA. They also probably aren't gonna charge that amount for the GCN.

I reserved a GBA for $5 (a ticket from EBX) and paid the normal $99.95 for the unit when I went to pick it up. They didn't require me to get 5 games an an attachable light as part of a bundle deal. Retailers are going to require that you purchase other stuff, which I would never support. Of course, that's just my opinion. I could be wrong.