Tuesday, November 14, 2006 - The Progress & Freedom Foundation Blog

Nonsense about Predatory Pricing of Video Game Consoles

I have come across some very silly applications of antitrust principles in my time, but this one has just moved up to the top of my list. Over on Business Week.com, Jason Brightman argues that video game retailers such as Game Stop are "forcing" consumers to commit to expensive product bundles in order to get their hands on a new PlayStation 3 or Nintendo Wii gaming console.

Mr. Brightman apparently thinks there is some sort of grave cosmic injustice at work when retailers bundle together gaming consoles with games or other products and require that users agree to purchase that bundle in order to be one of the first people to get their hands on a hot new console. He argues:

"Unfortunately it's become all too common in recent years for retailers, particularly specialty stores like GameStop/EB, to pull a fast one on consumers who are all too eager to get the newest consoles at launch -- remember last year's $1,000+ Xbox 360 bundles? While it's true that pre-order campaigns for brick-and-mortar locations allowed customers to pre-order nothing but the console, why should online consumers get the shaft? And is this even legal?... [U]nfortunately, it looks like this 'predatory packaging' is legal, but why the heck are consumers getting these console bundles shoved down their throats?"

Oh, come on! You have got to be kidding me. This is called capitalism, buddy. You know... supply-and-demand... rationale pricing of scarce goods... efficient market allocation, etc, etc. In fact, I want to make the exact opposite point that Brightman makes: I think the folks that are selling these consoles on a conditional basis or for a large mark-up are doing society a great service because they are ensuring that those of us who really want these scarce consoles the most can get are hands on them right away.

Unless he wants to make the argument that video game consoles have suddenly become life essential goods on par with food and water, his argument is just plain silly. After all, would anyone die if they had to wait a few weeks before they bought a stand-alone video game console at regular retail prices? How spoiled are we as a culture when we're even having a debate about fair video game console allocation!?!

Incidentally, what about all those people on eBay selling the extra consoles they bought for major mark-ups? Should they all be in jail? Or perhaps the DOJ or FCC should regulate the video game console marketplace to determine fair prices and efficient distribution of video game consoles to the masses. Perhaps the rallying cry for this new regulatory movement can be "From each according to his [gaming] abilities, to each according to his [gaming] needs."


posted by Adam Thierer @ 2:30 PM | Generic Rant