Why You Can't Buy A 360

Slate Magazine is running a story about the difficulties of finding an Xbox 360 this holiday season. They explore the reasons behind the console shortage, and have some ruminations on Microsoft's motives. From the article: "So, supply shortages are a fact of life. The puzzle is somewhere else: Why don't companies raise prices when supply is short and demand is frenzied? Leaving aside oxygen and a few other essentials, there is no such thing as an absolute shortage of anything: There is only a shortage if the price is too low. At the moment, Microsoft is easily selling out the half-million or so Xbox 360 units (there's no official number) for prices starting at $300 for the basic package. Why doesn't Microsoft price them at $700 instead?"

Comments

Re:Stores

[feed_those_kitties]

Because Microsoft has dictated what the price will be. You raise your price higher than that, you can kiss any future shipments bye-bye.

Same thing with minimum pricing. Ask why everyone sells iPods for the same price - because Apple says "you undercut our recommended pricing, you never see another iPod."

It's a game the retailers all play, or they don't get the hot products to sell.