Hacker News Reader

Comment by WarmWash | Hacker News Reader

I would be curious how the public would react to a Dutch auction, where Valve launches the console at a $10,000 price tag, and every ~hour drops the price by $100 until they are sold out. It creates the illusion that buyers are "breaking the line" when buying high, so it's their fault (not valves) for the high selling price. This would also eliminate scalpers.

View on HN

The problem with a dutch auction is if you don't know how a dutch auction functions, it looks like you're getting royally screwed. That's why they're usually reserved for professional settings.

How so? You don't like the price, you don't make a bid. You can only royally screw yourself.

What you said is correct, but only for a rational person. Note the wording of your parent comment: "it looks like".

Many if not most people will buy the thing for $X, then complain that someone else scored the same item for $X - $100.

"Dumb people are going to be unhappy" is a strange argument to make.

But plays a massive role in shaping society

Pissing off your customers by nakedly profit maximizing is great for one shot life games.

They would maximize profit for this launch and in the process damage a reputation that is literally worth billions. Gamers are famously sensitive, and famously have a long memory for PR fuckups.

If it starts at $10000, then the number of people that buy right away and get upset when it drops by $100 is roughly zero people.

Once the price has already dropped more than ten times, and the site says when the next price drop is, people will figure it out well enough.

It's like the complete opposite of "bidding fee"/"penny" auctions, which are very scammy and provide plenty of profit to the auctioneer, but people feel like they could get a great price. But if you make the math (and notice the dark patterns and know that usually there are also fake bidders...) you can see how much of a scam they are.

This basically makes the vendor the scalper, and the public would react accordingly.

Right, I think the problem with a lot of the economics-based analyses in this thread is that they rely on the assumption that Valve ought to, or wants to, sell the device at its market value.

High volume on low margin is an extremely good way to make money. It's very naive to think the easy way to get rich is to price gouge. It's actually often the worst.

Ticketmaster does this, and they are still around.

They are around because they control most of live venues and major bands don't care enough to fight. There are many ways to play steam games that don't involve buying nearly standard PC hardware at a premium.

Reply on news.ycombinator.com