With enough competition, someone is going to compete on price to attract customers. They obviously can’t sell for less than their costs (again, sufficiently competitive so you don’t get monopolies starving their competition), so that’s the floor for what they can sustainably charge. It doesn’t matter what the service is, if there are enough viable alternatives, at least one of them will go for the value play.
Sure. But if people aren’t willing to pay more than the cost of production, games wouldn’t be made. The cost of production is the floor, and the cost people are willing to pay is the ceiling, and competition finds a line somewhere in the middle.
if people aren’t willing to pay more than the cost of production, games wouldn’t be made.
Then that unmade game wouldn’t be relevant to this discussion.
The cost of production is the floor, and the cost people are willing to pay is the ceiling, and competition finds a line somewhere in the middle
Again, no it doesn’t. “What people are willing to pay” includes the competition. If one company undercuts another with a comparable product, consumers won’t pay for the more expensive one.
sugar_in_your_tea@sh.itjust.works 4 weeks ago
With enough competition, someone is going to compete on price to attract customers. They obviously can’t sell for less than their costs (again, sufficiently competitive so you don’t get monopolies starving their competition), so that’s the floor for what they can sustainably charge. It doesn’t matter what the service is, if there are enough viable alternatives, at least one of them will go for the value play.
Ulrich@feddit.org 4 weeks ago
What I’m saying is that competition is included in “what people are willing to pay”. Cost of production is not.
sugar_in_your_tea@sh.itjust.works 4 weeks ago
Sure. But if people aren’t willing to pay more than the cost of production, games wouldn’t be made. The cost of production is the floor, and the cost people are willing to pay is the ceiling, and competition finds a line somewhere in the middle.
Ulrich@feddit.org 4 weeks ago
Then that unmade game wouldn’t be relevant to this discussion.
Again, no it doesn’t. “What people are willing to pay” includes the competition. If one company undercuts another with a comparable product, consumers won’t pay for the more expensive one.