I’m sure Lobbyists convinced the government to ignore it. Other Pcgame makers certainly couldn’t. – That’s Economics and Big companies blocking market protections. People forget that before the Xbox Pcgames dominated the market.
I remember one time, just before New Years’, that my sister said that, if she was selling fireworks, she’d sell them at one cent each. That way, everybody would buy their fireworks from her, and she’d make lots of money.
We have a small local grocery. They charge over $6 for Cheez-Itz, that I can buy at Walmart for 2 for $5. The owner told me he can’t buy in bulk like Wally World, so it costs him more. I wondered why he doesn’t go buy a bunch at Wal Mart for 2-for-$5, then sell them for $3 a box…
It’s all a marketing ploy. Costco sells its hot dogs at a loss so it will bring you in to buy other stuff, HP almost gives away their inkjet printers knowing people will pay a fortune for their ink cartridges. Microsoft sold its xbox at a loss so they could more than make up with it selling their games, as well as jack the price up on future consoles once people were hooked on their platform.
First semester cost accounting-cost is broken down into fixed and variable cost. The variable cost for an Xbox would be the actual cost to manufacture- actual materials and direct labor. Then fixed cost(cost you incur if you produce 1 unit or 1 million units) is basically everything else-salaries of executives /plant cost/research/electric bill… Then total cost is determines and how you assign fixed cost. Do you divide total fixed cost by the total number of units whether it be XBoxes or Microsoft office units and assign every unit equal cost? Or does a $50 receive a lower fixed cost that a $500 unit? A joke from my 1973 cost accounting class-a salesman goes into a small restaurant and offers to put in a candy/nuts vending machine in the lobby and split the sales with the owner. The machine would take up about 6 sq feet. The owner is told sales should be about $200 month (so owner would receive $100) and electricity should be about $1 month. Owner checked with his CPA and was told he would lose $200 month-the machine would be charged with $300 fixed cost since it took up 6 sq feet of the restaurant and fixed cost-rent/utilities/insurance/manager’s salary was assigned on sq feet.
Robert4170 15 days ago
Jason is sooooo clueless, despite his book smarts.
Need coffee 14 days ago
Milo Minderbinder, eat your heart out.
Hello Everyone 14 days ago
It’s called Dmping or Predatory Pricing and is technically illegal.
Hello Everyone 14 days ago
Dumping
Hello Everyone 14 days ago
I’m sure Lobbyists convinced the government to ignore it. Other Pcgame makers certainly couldn’t. – That’s Economics and Big companies blocking market protections. People forget that before the Xbox Pcgames dominated the market.
Purple People Eater 14 days ago
I remember one time, just before New Years’, that my sister said that, if she was selling fireworks, she’d sell them at one cent each. That way, everybody would buy their fireworks from her, and she’d make lots of money.
toondel5 Premium Member 14 days ago
“We lose $50 on each sale, but we make it up in volume.”
ZarPaulus 14 days ago
This was when video games were sold for $50 on $0.50 DVDs.
tcayer 14 days ago
Microsoft should just buy them at Best Buy!
marktson 14 days ago
So am I cause i didnt get any of that
tcayer 14 days ago
We have a small local grocery. They charge over $6 for Cheez-Itz, that I can buy at Walmart for 2 for $5. The owner told me he can’t buy in bulk like Wally World, so it costs him more. I wondered why he doesn’t go buy a bunch at Wal Mart for 2-for-$5, then sell them for $3 a box…
rick92040 14 days ago
IBM made billions from selling chips to all the game console manufacturers.
dv 14 days ago
It’s all a marketing ploy. Costco sells its hot dogs at a loss so it will bring you in to buy other stuff, HP almost gives away their inkjet printers knowing people will pay a fortune for their ink cartridges. Microsoft sold its xbox at a loss so they could more than make up with it selling their games, as well as jack the price up on future consoles once people were hooked on their platform.
Gen.Flashman 14 days ago
First semester cost accounting-cost is broken down into fixed and variable cost. The variable cost for an Xbox would be the actual cost to manufacture- actual materials and direct labor. Then fixed cost(cost you incur if you produce 1 unit or 1 million units) is basically everything else-salaries of executives /plant cost/research/electric bill… Then total cost is determines and how you assign fixed cost. Do you divide total fixed cost by the total number of units whether it be XBoxes or Microsoft office units and assign every unit equal cost? Or does a $50 receive a lower fixed cost that a $500 unit? A joke from my 1973 cost accounting class-a salesman goes into a small restaurant and offers to put in a candy/nuts vending machine in the lobby and split the sales with the owner. The machine would take up about 6 sq feet. The owner is told sales should be about $200 month (so owner would receive $100) and electricity should be about $1 month. Owner checked with his CPA and was told he would lose $200 month-the machine would be charged with $300 fixed cost since it took up 6 sq feet of the restaurant and fixed cost-rent/utilities/insurance/manager’s salary was assigned on sq feet.
WhyIsThisHappening 14 days ago
Hey everyone! This is my first comment, so hello GoComics!!!
razzledazzle295 14 days ago
I need a crash course on economics.