Premium Prices
kmendo88 wrote: Many on here are correct in saying that EA would stand to make more profit if they made the market more accessible to more people. Based on what exactly? People have been saying...
Forum Discussion
Pricing digital content has always been problematic. In traditional economics, the minimum price for an item is its "marginal cost," what it costs to produce one unit for sale plus some portion of R&D/fixed costs that you're trying to recoup. You then add more for your profit (less when sales are poor and more when sales a good). But for digital content, the marginal cost is $0! So, once you've figured in a portion of your R&D/fixed costs, what should you charge?
In theory, to spur sales you should add only a tiny amount for profit. However, digital content is often priced on the perceived "value" of the product to the customer. It costs no more to produce a unit of Adobe CS 6 than it does a PC video game. However, a complete set of CS 6 lists for about $1500 and the game for $40.
As I see it, a company like EA has to gauge what they believe to be the value of the digital content and price it accordingly. What we seem to disagree on is exactly what that value should be.
In theory, to spur sales you should add only a tiny amount for profit. However, digital content is often priced on the perceived "value" of the product to the customer. It costs no more to produce a unit of Adobe CS 6 than it does a PC video game. However, a complete set of CS 6 lists for about $1500 and the game for $40.
As I see it, a company like EA has to gauge what they believe to be the value of the digital content and price it accordingly. What we seem to disagree on is exactly what that value should be.
