Videogame Bundles Get Boxes To Those Who Want Them Most

from the they're-gonna-want-the-games-anyway dept

As the holiday season approaches, there's no question that videogame systems are going to be one of the biggest sellers this year, and we can certainly expect plenty of stories about long lines and children who didn't get their wish because the store had run out of PS3s. And of course, as a measure of last resort, some parents will take to eBay and pay out the nose for a box at the last minute. Obviously, retailers would love to get more money out of the desperate parents, while not pricing others out of the market. One way to do this is by charging more to buyers who will pay up front for a box and a set of videogame titles. It's basically a form of price discrimination, which can be a benefit to consumers as long as that benefit isn't offset by irritation. Apparently the practice of guaranteeing consumers a box if they agree to buy a bundle is upsetting to some, since people are wondering whether or not these retailers are guilty of some sort of anti-competitive, monopolistic behavior. It doesn't look like this complaint has much merit. Nobody's being forced to buy the bundle, and if anything, they probably help consumers, as those who want them the most can pay up for them, while the price of the core product (just the box) is held steady for everyone else.


Reader Comments (rss)

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  •  
    identicon
    Anonymous Coward, Nov 13th, 2006 @ 9:18am

    I would pay more for a bundle if it guarenteed me a PS3 on it's release date...

     

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    Anonymous Coward, Nov 13th, 2006 @ 9:24am

    it's price gouging. if a ps3 and 10 games cost $x but the store charges an additional $200 bucks or whatever, how is that legal? you agree to pay more for something?

    when prices are set..what? 350 or something for the ps3 and 60 bucks a game, but the "package" has the ps3 for 450, and games at 85 a pop...?

    but then again...are these standard ps3 boxes? or are they ones that would otherwise be "normal" sales?

    now if that's the case, that's the real problem. extortion anyone? a store has 10 ps3 boxes, and 15 want them...the 10 people who will pay the most gets them? only fair in auctions.

     

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      Dizzle, Nov 13th, 2006 @ 9:45am

      Re:

      Perhaps the notion of supply and demand hasn't sunk in just yet. When a product or service is in short supply those in possession of it (retailers in this case) can and do expect to sell it for a higher price. This is not an issue of price fixing or market manipulation, its capitalism plain and simple. You may be inclined to argue that Sony is to blame for intentionally limiting supply...which while possible is unlikely because they do not benefit from the 'short supply' premium pricing.

      If one of our legislature wastes even a single second contemplating the legality of VIDEO GAME PRICES then he/she should be tarred and feathered.

       

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      Mike S., Nov 13th, 2006 @ 9:46am

      Re:

      Holy shit. Did you just say (write, type... whatever) price gouging? It's a video game system, for christ's sake -- not water. Get over yourself.

      Regardless of the product, price gouging is a fictitious offense. With scarcity, price goes up with demand. That a business increases price to make more money in the face of increased demand but limited supply is simply business -- hence the name. Price gouging is a farce.

      Can you really not wait till after christmas to get one at normal prices? Are your kids so spoiled and materialistic that waiting is not an option for them either?

       

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      Anonymous Coward, Nov 13th, 2006 @ 9:58am

      Price Gouging

      Price gouging is only applicable for items of a basic survival nature during times of emergency or disaster. If I am a retailer and I have 100 PS3's, I can put any price on them I want. I can charge $10000 per PS3 if I want. It is not price gouging. I will almost guarantee that I won't sell any, but I can still do it.

      If I am a grocery store and I normally sell bottled water for $10 a gallon, this is also not price gouging. If an emergency came and I could prove that my normal price is $10 a gallon, this also would not be price gouging, as my price for water remained constant before and during an emergency.

      Remember, high price does not equal price gouging. Nor do bundles, minimum orders, minimum total sales, or any other sales requirement.

       

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      Vincent Clement, Nov 13th, 2006 @ 11:58am

      Re:

      There is no such thing as price gouging. If I offer a bundle when demand is high, I should be able to charge what the market is willing to pay. When demand drops off, I'll be forced to lower the price. No one is forced to buy the bundles at a premium. Once again repeat after me: there is no such thing as price gouging.

       

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    Anonymous Coward, Nov 13th, 2006 @ 9:53am

    I don't see how this is price gouging.... each reatailer can individually decide the price to sell them. It's not like this is gasoline here, no one NEEDS a PS3. Couldn't the retailers justify the added price by saying that they are providing you with a 'service'? You don't have to wait like a 'normal' consumer. I guess I fail to see how this is a big deal because if most consumers don't like it, they won't pay more.

     

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    Anonymous Coward, Nov 13th, 2006 @ 10:02am

    price gouging. simple.

     

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    Anonymous Coward, Nov 13th, 2006 @ 10:03am

    whoever wrote this is a moron. you're saying that because someone can afford the bundled system means they "want it more"??? bundles are a total scam for the stores to guarantee themselves more money and screw the customer.

    it would be slightly less offensive if they actually said "system + 3 games of your choice" but its always some predefined bundle that forces you to own one or usually two totally crap titles that they will probably otherwise never sell - ie. "Xbox w/Halo2, Crash Bandicoot 10, and Rumble Roses".

     

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    Stephen, Nov 13th, 2006 @ 10:09am

    free market. simple.

     

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    LShaw, Nov 13th, 2006 @ 10:13am

    Price gouging

    I do not think this is price gouging. Sony and the rest of the game console maker do this on purpose. It get consumers excited about there product. I do not think that bundling games with console is gouging the consumer provided the consumer has another option and they do. The best option is to wait for the first price drop and there are plenty of games to play.
    Keep in mind to that retailers have agreements with there suppliers that they cannot just charge any price for there product. The suppliers normally set a selling ceiling and floor for there products. The retailer could lose the line if it breaks that agreement.

     

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    LShaw, Nov 13th, 2006 @ 10:13am

    Price gouging

    I do not think this is price gouging. Sony and the rest of the game console maker do this on purpose. It get consumers excited about there product. I do not think that bundling games with console is gouging the consumer provided the consumer has another option and they do. The best option is to wait for the first price drop and there are plenty of games to play.
    Keep in mind to that retailers have agreements with there suppliers that they cannot just charge any price for there product. The suppliers normally set a selling ceiling and floor for there products. The retailer could lose the line if it breaks that agreement.

     

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    Ryan, Nov 13th, 2006 @ 10:13am

    no they can't

    whoever said the retailers can charge whatever they want - they can't.

    Sony sets prices. Having worked in retail before, Sony tells customers "this is what you will charge for it, this is the date that you will sell it on"

    retailers who break those rules get in some deep shit with sony. By doing the package they're still able to sell the sony products at their own costs, but add in something else that they can charge more for. that's why they do it.

     

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      Vincent Clement, Nov 13th, 2006 @ 12:08pm

      Re: no they can't

      Are you sure you worked in retailing, because the last time I looked, dictating the retail price is called price fixing and that is illegal. If Sony dictated the price to retailers, they are the ones that would be getting in 'some deep shit' with their State's AG.

       

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        Retail Expert, Nov 13th, 2006 @ 12:57pm

        Re: Re: no they can't

        Vincent, you must not be from the U.S.

        Manufactureres routinely dictate retail price to it's customers (retail stores). In fact, although the sell price is ultimately up to the retailer, manufacturerers many times will require the retailer to sign a Sale Agreement Contract prohibitting them from advertising their product at a lower price than MSRP.

        Again, sale price ultimately is up to the retailer, however continuing a business relationship with the retailer is up to the manufacturer. It greatly benefits the retailer to stay on the manufacturerers good side.

         

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    Angry Rivethead, Nov 13th, 2006 @ 10:16am

    New consoles...

    I've never undertood the lure of consoles...

    Take the money you'd spend on the new console.

    Wait 2 or 3 months after the release date of the console.

    Spend it on PC upgrades.

    You'll have a system that from a performance standpoint will walk all over that PS3/Xbox 360. From a value standpoint...there is no comparison...easily downloadable user made maps...hacks, cracks, addon's...UI's and thats just for games...not including other stuff like skype and IM clients...email...

    Geh, I haven't bought a console since SNES.

     

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      Anonymous Coward, Nov 13th, 2006 @ 11:12am

      Re: New consoles...

      some people have friends and like to play games with them..in the same room.

       

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        Angry Rivethead, Nov 13th, 2006 @ 11:21am

        Re: Re: New consoles...

        You can do that with PC also...$15 wireless card in each unit or good ole fashioned wired.

         

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      Anonymous Coward, Nov 13th, 2006 @ 1:10pm

      Re: New consoles...

      Your a total idiot. PS3's technology "walks all over" your garbage laptop. it has cell processor technology along with...an 8..i repeat 8 core processor. Remember back whne Intel's DUO core processor was the end-all...yeah PS3 has EIGHT!!!!!!! So your bullshit PC can get outta here while im playing games on a cell broadband engine.

       

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        Angry Rivethead, Nov 13th, 2006 @ 4:24pm

        Re: Re: New consoles...

        Who said laptop? What does that cell processor actually get you that a Athlon dualcore won't...besides less flexibility? Your resolution is still limited by your TV. Do you have a TV that'll do 1080? Chalk that up to added expense...

         

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        Angry Rivethead, Nov 13th, 2006 @ 4:26pm

        Re: Re: New consoles...

        ...and you actually only have 6 "cores". #7 just runs security and #8 is disabled because they couldn't get it to run right.

         

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    Capitalism, Nov 13th, 2006 @ 10:16am

    This is called Capitalism. It's supply and demand. If you do not like it move back to what ever Communist shit hole you come from.

     

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      Not You, Nov 13th, 2006 @ 11:52am

      Re:

      Take it easy McCarthy.

      This is exactly how capitalism is structured to work. It always strikes me as odd that it's only after people realize that it doesn't always work for them, that they put down they're flags long enough to complain.

      Has no one here ever bought a car? How about a house? Sometimes things are "added" on, and sometimes someone else is just willing to pay a little more than you.

      And do you notice how capitalism works just fine for you when the things you want are within your price range? What about those that have no problem with the increased price because it's still realatively "cheap" for them. You won't hear no one from the upper class complaining .

      Quit complaining. Or at least recognize that this type of thing happens to Americans everyday with more important things like clothing and housing. This time you're only complaining because your precious little Johnny is threatening not to love you anymore if Santa doesn't bring home a PS3.

       

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    Anonymous Coward, Nov 13th, 2006 @ 10:19am

    Didn't sony advertise the system for a set price? And if a store sells for a higher price, isn't that illegal? Or would that be a false advertising suit with sony and the retailer?

    What if i preorder a PS3 (box only) come in on pickup day, and find that my box was given to someone who paid 300 bucks more? I had a contract for a reserved product. right?

    And one thing #2 did ask, (no one answered) are these "bundles" seperate from the box only, or are they from the same pool? If that's the case, that's an instore scam. (meaning you can only buy something w/purchase of something else like you need to buy $90 shoes to buy a $5 pack of socks. or something of the like)

    btw, gas isn't a neccessity. you can walk, or ride your bike to work.

     

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      erinol0, Nov 13th, 2006 @ 11:26am

      Re:

      What if i preorder a PS3 (box only) come in on pickup day, and find that my box was given to someone who paid 300 bucks more? I had a contract for a reserved product. right?


      What contract? Where did they promise that you would get one on the day it was released? More importantly, did an agent of the corporation sign anything promising to deliver on the day of release? Before the 2003 amendment to the UCC (which raised the amount to $5000), contracts for goods priced at greater than $500 are required to be in writing and signed. Many states, including NY (where I live), have not adopted this amendment and the amount remains at $500.

       

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    Old Guy, Nov 13th, 2006 @ 10:23am

    Too Expensive?

    If you insist on being "the first on my block" to own something, you're gonna pay a premium..period. Just about every product is the same in this way. You remember when HD TVs were around 10k each...price one lately? Here's a really novel idea.
    If you think something is too expensive, DON'T BUY IT!!!

     

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    Wiley, Nov 13th, 2006 @ 10:27am

    This dog wont hunt...

    And the PS3 won't work. Anyone that is first in line deserves to get what they pay for.
    SUCKERS!

     

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    Anonymous Coward, Nov 13th, 2006 @ 10:32am

    It is not free market, if supply is being manipulated! Perhaps capitalism, but not free market.

     

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      Vincent Clement, Nov 13th, 2006 @ 12:17pm

      Re:

      Um, manipulating supply is part of the free market. If I produce a good that is high demand, I can choose to restrict the availability of the good on the hope that prices will continue to rise. I may also choose to increase the availability of the good so long as my profit margin increases. But choosing either action may also backfire.

       

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    Anonymous Coward, Nov 13th, 2006 @ 10:32am

    we don't live in a true capitalistic society. if it were so, we'd have no trade laws, and things of that nature. true capitalism only benifits the wealthy, because everything will be sold to the "highest bidder"

    this is why we have those trade laws and things like that. so the "average" consumer won't get jacked in the rear.

    and the store isn't "adding" anything extra like mem cards and controllers. they take the PS3, some games, and tak on an additional 500 bucks or whatever. effectivly increasing both the cost of the console and the cost of the games. and those of you who would pay for that...should move to a communist country.

    and don't get me started on the parents willing to do anything to "make their kid happy". get over it. i did on many christmases when i got nothing.

     

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    Anonymous Coward, Nov 13th, 2006 @ 10:34am

    Price gouging? Extortion? Hardly.

    AC2: You're throwing around a lot of big-boy words in an accusatory manner, but I think maybe you're subscribing to the modern-day "everyone's a victim and it's not fair" mentality.

    1. This is a luxury item. This is an entertainment item. Nobody *needs* a PS3.

    2. Your vernacular use of "price gouging" is marginally acceptable in that *your opinion* of the price is that it's too high or somehow unfair (though I'm not sure who it's unfair to). It's really nothing more than hyperbole, though, until someone decides that the Holiday Shopping Season constitutes a civil emergency and declares the PS3 a necessity of life.

    If you dig a little deeper, you'll also find that many economists feel that price gouging laws (that do deal with civil emergencies) are many times doing more harm than good as price controls tend to make shortages worse and last for a longer period of time than they would with natural supply and demand pricing.

    3. Nearly every definition of extortion holds that threat of force, violence, or similar harm must be used in order to obtain some sort of gain (usually financial). Until the folks at GameStop show up on my doorstep with incriminating photos or a gun demanding that I buy a PS3 bundle or else, I think your claim of extortion is also a bit shrill.

    4. Your final claim is wrong. Barring contractual obligations with the manufacturer/supplier, a reseller can set whatever price desired or create any "value-added" bundle it likes. There's nothing magical about an auction, and there's nothing illegal about a seller and buyer agreeing on a price.

    If I'm willing to give someone more money than you for an object, and the seller doesn't have a contractual obligation with you (e.g., a pre-ordered unit at a specific price) or with the person they got it from (e.g., I told Sony I wouldn't charge more than $x for it), I bet I'll get the object. It might not make you happy, but there's nothing illegal about it.

    I don't have a problem with you not liking the bundle practices - I'm not a fan of them myself, and retailers need to make sure that the temporary cash increase they get during a high-demand period doesn't irreparably harm their long-term relationship with other customers.

    I'm not buying a PS3 because I think it's overpriced for the value I'd receive from it. I can think of a lot better entertainment values for $600+. Some people are willing to pay that price. I'm not.

    It's irresponsible, however, to throw around accusations and legal terms without knowing what they are. In the best case, it makes you look dumb (not to mention reinforcing the incorrect usage to others) and in the worst case could expose you to a legal action.

    Sony's lawyers could take your post to be disparaging or even libelous since you suggest, in "print," that they are engaged in two illegal activities (price gouging and extortion) that could harm their reputation in the marketplace. They probably wouldn't bother, but in these days of increasingly active entertainment company legal departments, you never know.

     

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    marsrock7712, Nov 13th, 2006 @ 10:45am

    are you sure youll get it?

    A great deal of E-bay users who sell pre-orders only are even more of a scam than just overpricing. From personal experience and the experience of people I know the product is never delivered. period.

     

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    Anonymous Coward, Nov 13th, 2006 @ 10:50am

    ac2's post is ambigious. it doesn't mention who's the pg or extortionist...

    to ac 21, maybe you are ac2? traying to make yourself look smart by posting a "bat comment" then correcting it? you might be held for legal actions, for your comments towards someone else, explaining your beliefs and comments. am i not correct?

    what's funny is that everyone then, that posts on TD who has any comment that could offent anyone else be marked as libel.

    but in order to prove libel, there has to be actual malice involved. i.e. that it was made knowing it to be false or with reckless disregard for the truth. since i doubt ac2 had any indepth study of said company's business practices, i doubt it's libel

     

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      erinol0, Nov 13th, 2006 @ 11:40am

      Re:

      but in order to prove libel, there has to be actual malice involved. i.e. that it was made knowing it to be false or with reckless disregard for the truth. since i doubt ac2 had any indepth study of said company's business practices, i doubt it's libel

      Actually, there only needs to be real malice with regards to remarks directed at public figures.

      The statement only needs to hold a particular person up to contempt, ridicule, or hatred in the community (and is false) for it to be actionable.

       

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      Anonymous Coward, Nov 13th, 2006 @ 12:39pm

      Re: 23

      AC23:

      You are correct, AC2's post is ambiguous and since it doesn't name any particular person or corporation would likely not be actionable. That doesn't mean that he or she won't name someone directly in a future post. People think of comment boards as transient, but I recently found posts of mine dating back to 1994. As search and data mining technology get more and more advanced, people should be increasingly careful about what they post online.

      As to whether or not I'm actually AC2, I suppose that will be a mystery lost to the ages or those with the ability to snoop IP addresses from the logs.

      I would point out, however, that a stylistic review of my post (21) will show that I used proper grammar, capitalization and punctuation, did not use ellipses (...), and didn't have any sentence fragments.

      Your post, on the other hand, was very similar in style to 2's including a very high question mark to period ratio, no capitalization with the exception of one acronym, and use of an ellipsis to indicate the trailing off of a thought. Perhaps you're actually AC2 having done a quick Google search to get a partially correct definition of libel?

      Actually, you probably aren't. AC2 didn't misspell anything.

      Love, AC21. ;-)

       

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    Anonymous Coward, Nov 13th, 2006 @ 12:04pm

    the american market at its best.

    retail stores could inflate prices to serve supply/demand. however, that might alienate customers, and end up losing money in the long run. likely? no. possible tho.

    the market has a great deal of flexibility in it. however, the consumer is the one that holds the key. if everyone stands up and says no to high priced PS3s, the price MUST come down, or sony takes a big hit.

    so if you don't like this, protest the stores...protest people taking out a second mortgage just to get a PS3. that'll teach em

     

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    dorpus, Nov 13th, 2006 @ 12:08pm

    Ha

    For some strange reason, English language media hasn't picked up on this, but posting such links is banned on techdirt, so I won't.

    1. The new PS3 has extensive problems, with games that have no sound, show funny graphics, fail to load or save, have slow response times, or freeze mid-game. There is an (unspeakable) web site detailing the extensive problems, with pictures.

    2. Chinese criminals hoarded PS3 boxes on the day it was sold and are re-selling them for $5,000 through auction sites. About half the customers who lined up for PS3 in Japan couldn't speak Japanese, and ringleaders were seen shouting instructions to subordinates.

    I have a link for that one too, but don't worry, you won't see it.

     

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    Anonymous Coward, Nov 13th, 2006 @ 12:14pm

    Price gouging is a frequently pejorative reference to a seller's asking a price that is much higher than what is seen as 'fair' under the circumstances. In precise, legal usage, it is the name of a felony that applies in some of the United States only during civil emergencies. In less precise usage, it can refer either to prices obtained by practices inconsistent with a competitive free market, or to windfall profits. In colloquial usage, it means simply that the speaker thinks the price is too high. Non-pejorative uses are generally in reaction to what the writer believes is an unjustified restraint on the market.

    So by definition, if a fair price for a PS3 is around $400 (or whatever it's supposed to be) and someone charges more, it is price gouging. so, AC2 WAS CORRECT is the useage of the word.

     

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    AC 2, AC21 and AC 36, Nov 13th, 2006 @ 1:11pm

    :-) Much love

    Actually, I much say that I enjoy trolling. Although I may have left some questions, I am the poster of all of the above comments.

    What a strange fun trip it's been.

     

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    Buzz, Nov 15th, 2006 @ 3:02pm

    no big deal

    I'm not sure if it was how I was raised or what, but I fail to see the big deal of having it ON RELEASE DAY. I mean, it is indeed exciting to have the console the instant it's available, but I'm pretty content waiting for the next batch. As a result, I see nothing wrong with this marketing technique.

    The same applies, for instance, to seeing the latest Star Wars movies and whatnot. I let the crowd kill each other for the first wave, and then I stroll in casually and calmly with the second wave.

     

    reply to this | link to this | view in chronology ]


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