With all the news about PS5 and graphics cards being so hard to get due to low supply and scalpers. What stops Sony, Nvidia, etc. from jacking up their prices? PS5 has been out for over 6 months. In economics terms I would think it is now the long run, so prices shouldn’t be fixed. The companies might as well get in on the action and cut out the scalpers. What gives?
In: Economics
The *market* does respond to scalpers…because scalpers are part of the market. As the people willing to pay a significant premium for early access get their devices, the scalpers will fade away and find something else. Their “business” model doesn’t work for commodity available stuff, it only works in times of scarcity. The manufacturers jacking their prices won’t stop scalpers, it’ll just move the money balance between the OEMs and the scalpers, because it won’t change the demand or willingness to pay of the end users.
The OEMs don’t make much profit off the consoles themselves, they make it off the games. Their optimal strategy is to manufacture as much as they can as fast as they can…they don’t *want* expensive consoles, they want everyone to have consoles so they can sell them expensive games and game accessories. Jacking the prices wouldn’t change how fast they can manufacture and would slow down broader uptake as their supply catches up to demand.
Latest Answers