Sony Profits Conundrum

Alice, over at the Wonderland blog, has an interesting post wondering about the state of Sony's finances when put in contrast with their view on second-hand game sales, and new title prices. From the article: "Yet it turns out that discounting new releases also results in higher sales. MCV continues: 'BVG's The Chronicles of Narnia jumped ten places up the ChartTrack top 40 last week, thanks to a 16 per cent sales increase, following its slashing to £19.99 at most High Street retailers.' My question: what the hell are they complaining about? Why curtail the perfectly reasonable and legal second-hand market if they're making money hand-over-fist with the current situation?"

Comments

Greed

[Gomer79]

Because they could make a little MORE money if there was no second hand market!

Optimum price

[sterno]

Yet it turns out that discounting new releases also results in higher sales.

This is about as duh as it gets. It's basic economics. At a given price, based on demand, you'll sell a given quantity. Lower the price, and generally you sell more. Raise the price, and you generally sell less. Of course it depends on factors like whether people can live without it (gas price increases for example).

The question is whether they make more money selling more copies at a lower price than they would selling less copies at a higher price. By the logic suggested here, they'd be making piles of money if they gave the game away because they'd sell more.