(Topic ID: 171125)

Increasing Prices: Good for Pinball

By brundaged

7 years ago


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  • Latest reply 7 years ago by LTG
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#8 7 years ago

Actually, brundaged, you have very little knowledge of market economics. A company finding the "most profitable price" for their products is almost always trading an immediate-term gain for a longer-term loss.

Markets are strengthened when they can be broadened and product purchases are repeatable. Extracting every last dollar narrows the customer base by shrinking potential buyers while decreasing the likelihood of repeat purchases for expanded offerings. Price elasticity is the subject of basic business economic courses through Masters and Doctorate level programs.

Simply put, Stern and JJP are scavenging their own customer base while alienating those who could become potential customers.

#23 7 years ago
Quoted from brundaged:

I wouldn't argue, for the most part. We can assume the producers view the market as cyclical and the present market situation to be temporary. It makes sense to establish themselves at the high end with increasing competition for the low end. And if the market contracts, they can always adjust down. In the meantime they need to generate profit for future development.

Generating profit for future development? First off, until recently they were using the pre-order model, so they were working with their customer's capital to profit. I've never heard of any consumer product so fortunate to have such a model: minimal capital outlay, predictable sales and very little financial risk. It's the equivalent of a casino giving you $25 to put in a slot machine that will pay you out $50 every pull.

Even with that model gone, what future development? There is very little extra tooling or capital outlay needed. They control they flow and volume of product. Their machines are just variations on an theme from an engineering sense. If this was the equivalent of say moving from 1080p to 4K, then I would understand it because there is the cost of advancing technology but that just isn't happening. Stern is now finally adding LCDs over DMDs. And that is likely saving them money because LCD costs are lower than DMD technology.

There isn't a ration argument that can be made for their pricing model other than price gouging. And they will continue to get away with it as long as people will pay. Doesn't matter how much bitching and moaning their is. Its the pocketbook that does the voting. Frankly, I was thrilled that the DI reveal at Expo was met with silence. The optimist in me was hoping that JJP (and others) would say that they've finally pushed too far. But we will see the inevitable rationalizing, likely. And people will plop down $12.5K for these pains. You know...a fool and their money is soon parted.

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