Quote:
Originally Posted by firstdown
Cutting the price is nothing new in this market. There are just so many people who will spend $600 and then they drop the price and the next group will spend. Then they drop the price again. Next they come out with the next best thing (which is probably already in boxes ready to go) and they drop the price on the now old system and even more people will now buy one. I'm still playing pong. For you younger guys that was the first one out with four different paddle game like tennis.
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Certainly cutting the price is a common tactic. It usually takes at least a year and probably xmas seasons though. Cutting it now seems like a desperation move. And I think there is something to be said for buyer disinterest.
A product like this is always hottest when it comes out. EVERYONE wants it right away. When you over price it you immediately make it unattainable to groups of people. As time goes by and the price comes down how many of those people, who may have bought it at $400 right when it came out, now won't buy it at $400 since they have become disinterested due to time or hype die-down? Even if they lose a 20% share right there(1/5 people which I think is way conservative) then you have lost millions and possibly billions.
I am thinking that out of every 5 people who didn't buy it at $600 but would have bought it at say $400 they lose 2 when they do eventually bring it down. Human nature rules the market and they piss away a good amount of market by missing the price point initially.