Thursday, March 25, 2021
Why doesn't Sony sell $1,000 Playstations?
As my newsfeed includes various global, tech, and gaming news, I'm still seeing news about PS5 shortages. Yes, in March 2021, "Walmart has PS5s in stock" is still headline-worthy. And from an economics point of view, this totally doesn't make sense. A console selling on eBay for twice the price is bad, because the added money goes to the wrong person, some scalper. If from the eBay price we can assume that the market value of a PS5 is $1,000, it should be Sony who is asking that price. Because then they could put the added revenue into more production capacity or other good use. The money in the scalper's pocket is helping nobody.
As Sony knew that the demand for their new console would be high, they could easily have said that the launch price for the console was $1,000, and then over time dropped the price to the "normal" level. The effect on the market would have been the same, with the more desperate fans buying a console at an elevated price, and the more reasonable customers deciding to wait. But if all that extra money had gone to Sony, they would have been able to ramp up production with the extra cash. And in the end, both the company and the consumers would have been happier.