Why You Can't Buy A 360

Posted by Zonk on Friday December 16, 2005 @04:36AM from the i-vote-for-a-space-conspiracy dept.

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?"

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ebay! by dismorphic · 2005-12-16 04:38 · Score: 5, Insightful

no need for microsoft to raise prices, as people on ebay will surely sell you one for a mere $1200!
1. Re:ebay! by Dachannien · 2005-12-16 05:43 · Score: 5, Insightful
  
  Your comment may have gotten modded funny, but I'd have given it an insightful, instead. This phenomenon is called arbitrage, and is quite common with heavily-traded commodities. It's not surprising that the same concept would be leveraged for profit here. In this case, Microsoft doesn't raise the price in the retail market because of the PR fiasco related to jacking up the price, while actual supply and demand concerns allow the price in the resale market to be much higher.