Sunday, November 27, 2005

Microsoft = Crack dealer?

So, apparently Microsoft is selling its new XBox 360 for less than it costs?! While this is not a new business practice, usually being the first product out (Playstation 3 and Nintendo Revolution aren't due out until 2006) equates to higher costs for those first adopters who are not normally considered bargain shoppers. For those of you wondering, they make up the profit on game pricing and licensure agreements with game developers. What does this tell us then about Microsoft, and probably Sony and Nintendo?

Clearly they are crack dealers, providing unwitting customers with a dangerously addictive product at cut-rate prices in an attempt to hook lifetime customers. Due to the fact that none of this product (XBox 360) is gaining dust on shelves, wouldn't it have been a better business decision to price it closer to cost? Its clear that people would pay for it. Thoughts?