52
« on: August 23, 2003, 08:29:49 PM »
I have read several topics such as this, and just now I have read another one on another site that just made me snap. So I'm reviveing this for prospereity sakes since some people have short memories. And since I didn't find a simular topic the last few days, I'm making my first orginally post in a long time.
I would first like to start out by say to those that like the idea of a fragmented market to stop moaning because the higher price is the direct result of free market trade on a market with numberous suppyiers and (I don't know a good way to this) multiple outlets for the supply. Because you see the oposite of popular, and blind, opinion that free market trade always produces lower costs. On the contray, espeically in the console industry, in most monopolys the products you pay for from them is cheeper than in free market.
The reason for this is in a free market the naturally occuring monopoly normally would want to keep competitors out so there are numerous ways to do so. One of them is cutting the price to the poit were any entrants into the market will not be able to make it feasible to stay in the market. Another is to have high quality and sell things at a normal range.
Let's first use the console market as an example.
When Nintendo use to have the natural occuring virtual monopoly with the NES, games were cheep and high quality, for the time. (The average NES game was $20-to-$30) This was a result of Nintendo not wanting to give any room to competitors. Now with all monopolys they come to an end usally because of them controlling the technology of that market. (Nintendo did that and Sega came in with better techonology, and MCI was created when AT&T didn't want to use satilite technology.) But as a result of Sega entering the market the price of the games rose dramatically. (Some games went new for $100.00, and that wasn't just because of the carts but companies trying to get profits in a fragmented market.) Not only that but when another compeitor entered the market not only did it up hold the higher average cost of the games (though by now they started to equalize as all things do) but the quality went down to help artifically drive down the production costs and the end price.
And now this generation there are still three contenders and prices seem the have stayed at last generation rates. But not all is rosy, because the price of producing those video games are still climbing higher, that because to sell a game in such a market you have to have glitz and techonolgy for those who want eye candy and not really games. That is why you hear developers saying they want to go back to the simpler (in design, not dumbed down) games it costs less for them to make but that is not entirely possible in such a sales enviroment. So as it stands right now most developers will have to face the discission to up final game costs or go out of business.
Next is the Handheld market.
Nintendo still has a natural virtual monopoly on the Handheld market what do you see. Game prices are still low and on carts, and that is were all of the Gameboy's rival are trying to cash in on. The price? Orginally games for the "Wideboy" use to be 10-to-20 US dollars when it first came out, now they are $30-to-$40 and that is easily explained as the increased cost because of inflation and carts are now not normally used outside of the market so production costs went up.
The handheld market games could go up or down right now and it depend on how well the rivals do eventally. Because if they do get a foothold what we seen with the SNES games will happen, the handheld game prices will go up to console prices maybe even higher (Not right away, it takes time for tension to build up.).
So the moral of the story is if you want a fragment market such as we have in the game industry don't go crying about higher game cost because the market is not controllable so the suppliers of the games have to fight for money. It makes me accually worry about what will happen if the PSP or Nokia accually do manage to break into Nitnendo's monopoly. And I have to say that Nintendo's monopoly is an example of a "good" monopoly there are bad monopolys (hmmm I wonder who...) and their are bad effects from even good monopolys (Techonoly, labor treatment, etc.)
There is also good to be said about the fragmented market. More companies so supposedly more ideas come to the table, the entrance cost of the gamers (consoles) prices are lower. (Unfotanetly we may see a back lash from this also.)
So there is most of it. Please feel free to discuss.
Show Posts
(I'm looking into an static IP address software.
