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Why You Can't Buy A 360

Posted by Zonk on 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?"

5 of 168 comments (clear)

  1. ebay! by dismorphic · · 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 · · 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.

  2. Supply vs. demand by alienw · · Score: 5, Interesting

    Because supply vs. demand only works in freshman economics class. If Microsoft priced the things at $700, nobody would buy them if they knew the PS3 would be $300. Furthermore, there are certain expectations for console pricing. Every company that tried to make a $700 console (namely, 3DO) died a slow and painful death.

    Besides, the idea behind selling consoles is not to make money. The real money is made on games. The console needs to go to the people who will buy the most games, which are also the people most eager to wait in line at Best Buy all night to grab a 360.

  3. It's about the cool factor. by Supurcell · · Score: 5, Funny

    Because a company has finally come around that doesn't care about money. A company who decides that they want to make their customers look cool by being the only one on the block to have their rare game system. If you go out and by commonly available, high-priced system, you are a rich snob. If you go out and mannage to get your hands on a semi-high-priced, nearly-nonexistant system, you are truly the coolest of the cool.

  4. Re:Stores by feed_those_kitties · · Score: 5, Informative
    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.