Is there an example of this happening anywhere in recent history? I ask because it seems absurd to me that there is an industry so fragile that retailers taking a bit less profit would lead to sudden, total collapse. (And doubly absurd this might apply to airlines.)
The claim was "kills an industry", but from what you say, the industry's still going. And you say the critical factor was "kept them away from the good gates", which is exactly the kind of thing that is solved with careful regulation, not deregulation.
I agree a monopoly over a small market niche sometimes happens even in antitrust contexts. That can happen with or without price wars. I also agree monopoly pricing power is bad. (Although not nearly as bad in a niche, because other well-funded competitors get an incentive to step in the more prices get out of line.) But none of this is proof of the death of an industry.
Nobody can dare simply sell a game on the iOS or Google Play store for $5 or $10 anymore, because there's far more "free" ones out there. This has turned lots of people off of these storefronts. The race to the bottom is real.
Except that's patently false. All you have to do is look briefly on the iOS App Store and you'll find plenty of games for $5+. Sure, there are a lot more that are "free (with in-app purchases)", but the idea that no one can make money in the space is just totally absurd.
Furthermore, even if what you said was true, it would not be a genuine example of what the previous poster was describing, because people are still making money off those freemium games. What the other poster was describing was prices going through the floor, no one being able to make money in that space, and the entire industry drying up and blowing away.
Yeah. They tend to have low sales numbers. I worked on one. Just because they exist, doesn't mean they make return on investment. When we switched to a free-to-play model for our next game, we made a lot more money in ads and IAPs.
> because people are still making money off those freemium games
Airlines took up of the practice of nickle-and-diming the customer to get the initial sticker shock down, since that's basically all anybody ever competed on. If that price gets any lower, the amount of extra addons and fees will have to go way up to compensate, or service will get cut.
Just because some people are making money, doesn't mean it's a healthy market. I think most experts would agree that the mobile game market is incredibly unhealthy.
I think your second point depends on how you divide things: clearly there is money in gaming but it does seem like it’s hard to make a game which doesn’t rely on IAP and slot-machine design — so much so that Apple launched an entire service to change the market dynamics.
[1] https://sensortower.com/blog/app-revenue-and-downloads-2019
The mean is also uninformative - for many games the majority of revenue is provided by a small number of 'whales', and their behavior is not representative for a normal user.
Perhaps a histogram would give an accurate impression, but I'm unsure whether app devs and Apple/Google would want to make that info public.
If a drug price drops below the point where there is insufficient margin to create or sustain manufacturing capability, it stops getting made. This is one source of drug shortages and, to my understanding, why the world health org created a list if essential medicines. This would be a list that countries could use to develop availability controls.
I love low airfare as much as anybody but the claim that price transparency leads to price erosion isn't ridiculous. I honestly think that the trend towards lower prices has led to the reduction in quality of the flying experience as the airlines try to accommodate both low prices expected by consumers and high margins expected by Wall Street.
But your point is fair. The capacity rarely disappears completely because of price transparency. Only innovation and obsolescence will completely take that capacity offline.