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Tuesday, November 29, 2005


Video Game Industry

When I heard that Microsoft was comming out with a new version of the Xbox I was not surprised; however when I heard it would be retailing for $300-$400 I was stunned. I personally do not know anyone who can afford this and that is an they price does not even include the games or accessories. I always thought video games were for kids but this consule is clearly targeted towards older, wealthier individuals. To my amasement there was a line last tuesday to purchase the system and Target (my work) was handing out numbered tickets to buy them. The store only received 12 units and there was a line of 20 or so people before the store even opened. Not only can people afford this unit but there was competition to get it. According to the economist, Sony was not happy with this recent development. Microsoft moved their release date up when Sony announced plans to release Playstation 3 early next year. I know competition is good in terms of economics. However Microsoft is not concerned with profit- their only hope is to break even. What they are trying to gain some of Sony's market share. It amazes me that a corporation can afford to break even with something as huge as a new software release just in hopes of possibly getting their foot in the door.

I suspect an effort to increase market share is motivated by an interest in profit.
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