Very Interesting Xbox 360 Survey

[Shifty Geezer]

It's also tiresome to hear the same old "it only costs X to manufacture...so it should sell for less" arguments, when the cost of materials to build is

Then that ellimates the point of discussing prices, short of subjective comments 'I'm happy to pay that' and 'I'm not happy to pay that.' Of course price isn't dictated by cost to manufacture, but comparing like products from different manufacturers, and seeing how their prices differ, and seeing how the technology differs, and relating that to costs involved, you can see which companies are by your values over-charging based on technical criteria, and boycott them accordingly (if people are inclined to do that).

eg. XB360's 64 MB memory card. If it was the only memory card in the world and costs $30, would anyone complain? Nope. If Sony and Nintendo release 8 MB memory cards for $30, is it wrong to question why they aren't managing to fit 64 MB into that $30 the same as MS? If Sony and Nintendo release 64 MB memory cards for $15 apiece, won't people start questioning the higher price of XB360s? Why shouldn't they? They've got a comparable product from rivals that are half the price. As a consumer, shouldn't I make an effort to avoid companies that charge too much in order to promote lower prices for consumers? As you say...

Sure. I find it frustrating when people complain about the cost...and then go ahead and buy it....which only supports the price.

Supporting overpriced products isn't good for consumers, but the only way to know if something is overpriced is to gauge it's value relative to simlar products and guestimations of product value based on various criteria.

Now go back to the XB360 memory card, and compare it to the full Flash market. Is 64 MB for $30 overpriced, when 32x the capacity is available for less money? Heck, yeah! Should I as a consumer be happy to pay well over the odds for that memory card? Not really. And if someone shows me a list of prices for XB360 peripherals that are all 50-100% more pricey than either what the rivals have, or what seems appropriate for the technology used in them, is it not wise for me as a consumer to say to myself 'well, while MS are overcharging for peripherals, I'm not going to buy into their product range!'

How can those consumer decisions be made if people aren't able to consider the worth of products? Are all considerations for price supposed to be gut reactions without any rationale to them? If I see a price-tag off $70 on a controller, should I just react 'that's okay' or 'that's too much!', or shoud I investigate the product and find out what it costs to make and how it compares with rivals, to determine whether that $70 is actually the lowest price the controller can be made for, or carrying profit margins of 70%, or is a fair sort of price?

 

[Joe DeFuria]

...but comparing like products from different manufacturers, and seeing how their prices differ, and seeing how the technology differs, and relating that to costs involved, you can see which companies are by your values over-charging based on technical criteria, and boycott them accordingly (if people are inclined to do that).

Doing comparisons that way is dangerous. You cannot see what companies are "over charging" without looking at an entire picture of the product and everything that touches it (hardware, software, services (live), support...etc.)

MS might be charging "more" for a "comparable controller", but "less" for a "comparable console". And what is "comparable" is subjective at best, considering what constitutes a valid comparison varies by the individual.

eg. XB360's 64 MB memory card. If it was the only memory card in the world and costs $30, would anyone complain? Nope.

Right...because consumers are stupid like that.

Does the fact that some other memory card exist in a different format change the capability of the 64 MB card with the xbox? Nope. Sony can come out with a 1 KB memory card for $5000, or a 256 GB card for $.50.

That doesn't change the "value" of a 64 MB card for the box one iota. You can still save the same amount of data. The question is...is that amount of data worth the price?

It's kinda like when people buy a brand new high-end video card....and then 6 months later a NEWER card comes out...and the person is all pissed. Why? Is his card suddenly doing less than what it did when he bought it?

...They've got a comparable product from rivals that are half the price. As a consumer, shouldn't I make an effort to avoid companies that charge too much in order to promote lower prices for consumers? As you say...

Sure...there's the rub. If the perceived value of the peripheral is lower, the price will have to be lowered.

Supporting overpriced products isn't good for consumers, but the only way to know if something is overpriced is to gauge it's value relative to simlar products and guestimations of product value based on various criteria.

No, that's not the only way. (See above). Of course, people do it all the time...no argument there.

Now go back to the XB360 memory card, and compare it to the full Flash market. Is 64 MB for $30 overpriced, when 32x the capacity is available for less money? Heck, yeah!

Then plug those 32x capacity cards into the XBox 360.

Should I as a consumer be happy to pay well over the odds for that memory card? Not really.

I really do understand the "frustration." Again though...the money needs to be made somewhere.

Should you as a consumer be thankful that they can buy a console for below cost? Let's see a raise of hands of anyone who actually thanks MS (or Sony) for it.

And if someone shows me a list of prices for XB360 peripherals that are all 50-100% more pricey than either what the rivals have, or what seems appropriate for the technology used in them, is it not wise for me as a consumer to say to myself 'well, while MS are overcharging for peripherals, I'm not going to buy into their product range!'

ABSOLUTELY. Which is why I keep repeating: "If you don't like it...don't buy it!"

Of course, there is more to a console that peripherals. So all of the pros and cons (availability, game price, game library, console price) etc., all come into the equation when assessing the total value of a console.

 

[London Geezer]

Well...(and the emphasis is his, not added by me).

Well to be 100% honest with you, i do agree with that statement. MS are greedy, arguably greedier than most other companies. They wouldn't be one of the richest companies in the world otherwise.

What they're charging for their software is ridiculous, and what they want to do with the whole DRM mess is even worse.

Then again, Sony also want to enforce their own DRM system (see Bluray), not only that but they want us to pay preium price for material we've seen before, at a cost that is negligible compared to the price we'll be paying (again, Bluray movies).

Really, it's a bit like discussing who's hungrier, the lion or the wolf.

 

[Joe DeFuria]

Well to be 100% honest with you, i do agree with that statement. MS are greedy, arguably greedier than most other companies. They wouldn't be one of the richest companies in the world otherwise.

Couldn't disagree more. Profit involves more than just motivation. It requires planning, execution, timing, etc...not to mention some luck. I would submit that MS and Sony are just as "motivated" (greedy) as one another to turn a profit.

Notice, if we use your logic...you would have to say that Sony is INSANELY GREEDY in the console space, considering their profits historically with Playstation vs. the X-Box. Hell, MS has yet to TURN a profit with their console division...so I guess then MS is actually quite altruistic!

 

[scooby_dooby]

Equating "greed" with a "different philosophy on pricing schemes" is just well, stupid.

You know what's stupid? Calling a $130 CAD usb wifi dongle a "different philosphy on pricing schemes."

Ya it's a different philosophy alright, I think it's called: charging twice as much as it's worth. AKA price gouging. MS can make a profit without completely ripping people off.

I just don't agree with it, I think they are pushing the boundries too far, and that goes for peripheral pricing almost across the board. Coupled with their policy of locking down all 3rd party competition, and it's just an ugly situation. They are overcharging for what's available, and not allowing for any 3rd competition, it just doesn't sit well with me. I wouldn't mind the lack of 3rd party competition if they showed some restraint with their pricing, but they aren't.

Also, my point wasn't that MS as a company is overly greedy, that was a poor choice of words, greed is not the issue. All corporations are greedy, they're supposed to be. It's more a matter of taking advantage of early adopters to squeeze every penny out of em, like water from a stone. It's the EA mentality, nickle and dime to the Nth degree...and it's not just slightly overpriced, some of these things are twice as expensive as they should be.

 

[scooby_dooby]

The question is...is that amount of data worth the price?

And the answer is a resounding NO. That's the entire point.

 

[Shifty Geezer]

ABSOLUTELY. Which is why I keep repeating: "If you don't like it...don't buy it!"

But that doesn't work. It's the ideal that's required for pure capitalism to function, and it's an ideal behaviour human beings don't exhibit. If we take it from Scooby's POV, he wan'ts a controller for his XB360 that has a decent D-pad (by his definition of decent). The current is $50 and no good. If MS releases another controller that fixes this problem, but charges $70 for it, what's Scooby supposed to do? There's two options

1) Buy the controller as it's what he wants although he's unhappy paying that much
2) Don't buy the controller and be stuck with naff controls in his game

In theory, if all XB360 owners are like minded, they'll pick 2, the controller won't sell, and MS will have to re-evaluate their options - which likely will remain as stick with the $50 controller that people are buying and leave them with a duffer D-pad. Only if sales for the platform are harmed by having an inferior D-pad will they be motivated to release a controller that's both comfortably in the price range of their customers and solves the D-pad issue.

However, you can't get individuals to act cohesively towards an aim without inordinate amounts of organisation. There's loads of behavoural influences that prevent people acting that way. Compare the ideals to reality - if no-one chose to fight, there'd be no wars and no need to fight. So why do we have conflicts? If one person chooses to fight, others either get beaten up, or they have to fight to defend themselves. A person quixotically adhering to their principles generally just gets bypassed and has no influence on anything.

In this controller situation, even if people pick option 2, you'll get people who pick number one, and reluctantly part with their cash because they want the D-pad. MS sees the controller selling and say unto themselves 'hey, looks like we picked the right price-point there. It's selling and we're making luvlly profits.' They won't drop the price and those refusing to pay get lumbered with the old controller. You won't ever get a position where you can refuse to buy the controller because it's priced too high in your opinion, and get them to release the controller at a price you are willing to pay, when they don't have competition with other controllers. If Logitech were competing, giving customers choices, it'd be a different matter. But MS have locked them out. So you only get the two options above.

In the big picture, as you say, you can compare the price of XB360 as a system including extras versus the competition, but how can you know when deciding where to spend your money if the D-pad of the standard controller is going to be naff and you'll need to spend another $70 to get a decent one? Or how do you know when you buy that console that its 64 MB memory card is only large enough to store 2 game saves, and that it'd have been better value to buy the other console that'd let you use all those old camera memory cards you have lying around? You can't factor in those extra costs because they're so complex and full of unknowns. That's why peripherals need to be valued as extras and not part of the system.

That doesn't change the "value" of a 64 MB card for the box one iota. You can still save the same amount of data. The question is...is that amount of data worth the price?

It's kinda like when people buy a brand new high-end video card....and then 6 months later a NEWER card comes out...and the person is all pissed. Why? Is his card suddenly doing less than what it did when he bought it?

This is something I agree with, but this is different to the argument at hand. We're not talking about a product's worth changing because of changes in the market. We're talking about a product at a price that's incomparable to other options. If you buy a GF8800 for $2000 dollars, and then a week later a dozen other companies release GF8800 cards for $500, the value of your card has gone down because value is relative. Your card has now cost you $1500 to have it for one week earlier than everyone else, and at the time you bought it you didn't know there'd be cheaper alternatives. If it was the only GF8800 in the world and you were happy to pay two grand for it, if the price drops over time that's no beef. If you spend that much and then find the company you bought from charged 4x as much as everyone else, you know that the card isn't worth as much as you paid. Generally speaking, all human values are relative, and it's through comparisons that we form our own ideas of worth.

If someone was happy to buy the new controller at $70, and then it dropped to $70, if they whinge then they're a fool. They got the product they wanted at the price they were willing to pay. That's not the same as wanting a controller with better (basic) features then the one provided, for which the only option is priced higher than rivals, where the comparisons used to determine value of an item show it's priced higher than you believe it's worth.

Well, not sure if any of that makes sense. I'm supposed to be in bed already!

 

[bystander]

About the wireless controllers, can't a third party make one like this[/url?

Where you have your receiver plugged into your controller port, so to the console it appears as if it's a normal wired controller and the receiver manages the communications between your joypad and the console.

As for perpheral pricing, Microsoft makes a loss on each console, so I don't think it's entirely unreasonable for them to want to make a very good profit on the perpherials (bearing in mind that not everyone will buy every perpheral or even possibly a single perpheral). I can imagine that the profit they make on the perpheral would in some way be tied to the % of people that are likely to buy it. And that MS expected a certain amount of the profits to come from perpheral sales and priced everything accordingly. They probably certainly wanted to start making money back far quicker than with the Xbox, and perpherals would be another fairly easy way to do that.

So you'd put greater markups on items people are less likely to buy/fewer people will buy, as you'd still have to manufacture the item, store it and wait for someone to buy it before you make a profit on it. I'm sure the length of time that a controller sits on the shelf/warehouse is less than a wireless dongle.

I'm not justifying the price that MS has set, just one possiblity for why the the wireless dongle or any perpheral you're not likely to sell a signiifcant quantity of costs so much more. I'm sure MS has done calculations where for example they made the price of the dongle is 35% less and their calculations might have said it would only increase sales by say 15%. Which could have told them it would be more profitable to sell it at the higher price, so why would you sell it at the lower price?

Overall I believe the percentage of profits MS makes from perhperals is going to be greater from the joypads than say the wireless dongle (even with costing as much as it does) or the 64MB memory cards.

 

[Graham]

Over here:

No name brand, a/b/g wireless Pci card, bottom of the barrel stuff from a internet retailer, the cheapest you'll find is $120nz.
For a name brand, you are looking at $160-200 (D-Link, for example will set you back $188). More if you buy it in a shop.

The 360 wifi adapter is $190 here from a normal retailer. It is smaller, looks good and doesn't need drivers.

How is that not reasonable?

 

[Shark Sandwich]

About the wireless controllers, can't a third party make one like this[/url?

Where you have your receiver plugged into your controller port, so to the console it appears as if it's a normal wired controller and the receiver manages the communications between your joypad and the console.

As far as I know, none exist yet. Could it be that MS won't allow it? If they are keeping their wireless protocol closed, it would make sense that they are also forbidding 3rd party peripheral manufacturers from creating their own wireless receivers.

As for perpheral pricing, Microsoft makes a loss on each console, so I don't think it's entirely unreasonable for them to want to make a very good profit on the perpherials (bearing in mind that not everyone will buy every perpheral or even possibly a single perpheral)

This is undoubtedly true. However, it's a business model that we consumers aren't used to. It used to be that console makers would make the money back mainly on game sales. Peripherals, however, sold at what I would consider a reasonable but slightly steep price, with el cheapo third party alternatives available for everything (how many times have you gotten stuck with the cheap ass N64 controller when you were playing Goldeneye?).

I can certainly see why MS would try to nickel and dime us on everything they can, but that doesn't mean I'm ok with it. They should at least allow third party hard drives, memory cards, wireless controllers, and wifi adapters. Can you see why many people are upset about this?

The 360 wifi adapter is $190 here from a normal retailer. It is smaller, looks good and doesn't need drivers.

How is that not reasonable?

That doesn't sound so bad. I guess it's a different story in the USA. A quick search on Amazon shows USB WiFi adapters selling for $30 average, with some of the fancier ones around $50. The 360 WiFi adapter costs $100 here. I certainly think THAT is unreasonable, especially when there is no third party alternative.

 

[bystander]

I can certainly see why MS would try to nickel and dime us on everything they can, but that doesn't mean I'm ok with it. They should at least allow third party hard drives, memory cards, wireless controllers, and wifi adapters. Can you see why many people are upset about this?

I understand why people don't like it and I was not saying that I agree with the way MS has done the pricing. Eventually I'm sure some enterprising third party will find a way to make these perpherals, when the demand becomes great enough, which might force MS's hand.

 

[pipo]

For a name brand, you are looking at $160-200 (D-Link, for example will set you back $188). More if you buy it in a shop.

The 360 wifi adapter is $190 here from a normal retailer. It is smaller, looks good and doesn't need drivers.

How is that not reasonable?

My thoughts exactly.

 

[Joe DeFuria]

Ya it's a different philosophy alright, I think it's called: charging twice as much as it's worth. AKA price gouging. MS can make a profit without completely ripping people off.

WWWAAAAAHHHHHH!!!!

After you're done crying, please send MS a check for the difference between what you paid for the 360 console itself, and what it's actually worth.

Give me a break.

I just don't agree with it, I think they are pushing the boundries too far...

Then sell your 360 and don't buy any more of their stuff. Problem solved.

The bottom line is, as long as the stuff sells, it's "priced right." END OF STORY.

 

[Joe DeFuria]

But that doesn't work.

Of course it works.

... what's Scooby supposed to do? There's two options

1) Buy the controller as it's what he wants although he's unhappy paying that much
2) Don't buy the controller and be stuck with naff controls in his game

You forgot 3:

3) Sell his 360 and buy something else that "meets his definition of value" for a gaming experience.

That's a very simple solution. Why doesn't he just do it? My guess...he believes there is enough value in his 360 gaming experience as a whole to continue on.

...for which the only option is priced higher than rivals, where the comparisons used to determine value of an item show it's priced higher than you believe it's worth.

Again..by definition, if you buy it, you believe it's worth it.

 

[scooby_dooby]

3) Sell his 360 and buy something else that "meets his definition of value" for a gaming experience.

That's a very simple solution. Why doesn't he just do it? My guess...he believes there is enough value in his 360 gaming experience as a whole to continue on.

Sure, but I will still voice my displeasure in their stupid hardware pricing and overly restrictive licensing program.

The 4th option is the best:
4) Allow your consumers a range of both 3rd party and 1st party peripherals so they can CHOOSE whether to pay the premium for the quality, or purchase a lower priced alternative, without having to "Sell his 360"

 

[scooby_dooby]

The bottom line is, as long as the stuff sells, it's "priced right." END OF STORY.

This is the stupidest thing I've ever heard. "Stuff" will always sell, regardless of the price. The volume is what is affected, and we absolutely no way of knowing what the volume would be at alternative pricepoints.

What a totally ridiculous position.

 

[Joe DeFuria]

This is the stupidest thing I've ever heard.

Like I said, I'm a capitalist.

If you don't believe in the concept of supply and demand, then what can I say?

"Stuff" will always sell, regardless of the price. The volume is what is affected...

Duh.

... and we absolutely no way of knowing what the volume would be at alternative pricepoints.

MS has an Idea / Estimate of what the volume would be. That's the point. It's up to MS to determine / guess how pricepoint would impact sales volume...and thus determine profits... so MS will set the price accordingly.

What a totally ridiculous position.

Yeah...let the person who's selling the product set the price...and let the consumer decide if we wants to buy the product at that price. What a ridiculous concept...

If you want to be pedandtic about it:

"As long as stuff sells with the volumes that MS has targetted, the price is right."

I assumed that bolded part would be implicitly understood.

 

[Shifty Geezer]

This debate should probably be ended here. There's a fundamental difference of ideology/philosophy that'll just lead to people repeating their position, and as the ideology here is more a case of whether capitalism works or not, it really belongs in the Social, Political, Religious, Hostility Forum or whatever it is.

I'd say those that want to discuss the worth/value of products from a technical POV should be left to do so, whether they are right or not in comparing products, as that fits in with the remit of this particular forum.

 

[Tap In]

This is the stupidest thing I've ever heard..

What a totally ridiculous position.

you're way off base here Scoob.

Originally Posted by Joe DeFuria

The bottom line is, as long as the stuff sells, it's "priced right." END OF STORY.

this is correct. Capitalism Scoob. It's the way of the world my friend. everything is WORTH what people are willing to pay for it. Not "what it costs to produce plus a markup"... end of story.

of course I live this definition every day as I run a small business where I am often a middle man or marking up product at a high margin (because that's what my clients will pay and what they perceive as Value)

so by your definition, I'm a creep and a scoundrel.

 

[scooby_dooby]

No sorry, the fact something sells is only an indication that "some" peole are willing to pay for it. If a wifi adapter is priced at $500, i'm sure a couple thousand people would buy. Therefore it would selling, and by your definition, $500 would be the right price.

The idea that just because something 'sells' it's the correct value it ridiculous, it may sell 10x's more at a lower price, indicating the lower price was more along the lines of being the correct value.

For example, GOW could be $500, it would sell a tiny fraction of what it sells now, but it would still sell, would that then make $500 the correct value for GOW? I think the flaw in this logic is pretty obvious.