Quoted from flashinstinct:The only thing you leave out in your calculations is the frustration that you lay on your consumer base.
For example, here in Canada we get gouged on Telecom services because there are only 3 big fish (Bell, Rogers, Shaw/Telus). These three big guns increased pricing for no real reason for years on internet, tv, mobile and phone services. Then netflix came along and completely changed the rules. This year alone, I'm one of 260K canadians that cancelled their TV service and went streaming solo only. I'm not even close to going back they pissed me off so much that I don't even bother looking at their offerings. Rogers tried launching shomi (netflix ripoff) and failed, Bell as craveTV but I'm sure they are not doing as well as netflix.
Point is, piss off someone long enough and you lose them as a client even if you lower the price of your items. When I cancelled they tried taking 60% the price I was paying which a) pissed me off even more and b) proved to me that there entire platform was based on gouging.
To offset these loses they keep increasing the price... sometimes you can't even find the logic in it. It's like they are starring down a loaded barrel and don't even bother getting out of the way.
It might not relate exactly with pinball but principle is the same. A pissed off client base is never good for business even if you make record profits in the short term. It's shortsighted. I'm sure Bell still wonders where Netflix came from.
That right there is well said.