Penny Arcade responds to our "hideous editorial," misses the point [update 1]

IT'S $250 DAMN DOLLARS! That's one INEXPENSIVE console. Who cares if Nintendo makes a profit. Honestly I'm happy that Nintendo's gonna make a profit off of me at launch date, because innovation should get payed and Nintendo has more innovation than Sony and Microsoft combined times two and they always have. Really though, you can't complain when the console is that cheap. Personally, I'm extremely happy with it.

Your argument is just worthless, a system is more valuable because the company is willing to take a loss on it?

I pay for play value. Why would I pay $600 for something, when for $250 I have something I want more? I'm not getting ripped off, I think I'm getting a great deal. Sony and Microsoft built systems I can't affored. On top of that, I'm not really intresed in a lot of the games they have. In the case of Sony, yes, I admit, there are some major advantages in it. It has the FF series, along with lots of other goodies I would love to play. However, the Wii has got just as much that I want, and for half the price.

What I fail to understand is where it says that the two availible colors of the Wii (white and black, AFAIK) are different in price. The colors of all their other mutli-colored consoles were all the same price (except for those which added something else and were limited edition, such as the gold GC with Zelda or the teal DS with Nintendogs).

I am also shocked by the flack the price is getting. $250 is reasonable. I still don't have a 360 because I am not willing to pay $400 for the one that's worth buying and I will not be buying a PS3 until the price is driven down because $500-$600 just isn't worth it.

Before you say anything, no, I am not a fucking fanboy. I tend to get every console because I want to be able to play everything good that comes along. If something good came along that was on just one system, I'd be fucked now wouldn't I? It just pains me that the other two consoles on or coming into the market aren't worth paying such an exuborant ammount of hard earned money for, while the Wii is not only worth it, but much cheaper.

I think that everybody here is failing to miss the point, What nintendo aims to do with the Wii is to finally break into one of the most untapped markets out there. Females. Complaining about the price and how much it cost is irrelevant, because if you are complaining about it, you've already made the decision on some level to purchase it. If it comes in Tangerine and you want tangerine, you pay more. It's business pure and simple. I will buy my white Wii..but a few of my female friends will see the Wii, see it in action and not care of the price tag. They like it and they want it. Simple. Don't like, don't buy.

And if you haven't seen by design alone, that the Wii is a system with a early- late teens, female demographic in mind idk what to tell you other than you are having many a blockbuster night.

I fail to see the point of this post. Nintendo managed to reinvent the "game system" and did it in a way that was cheaper than Sony or Microsoft were able to "rehash the same old shit". They are able to charge an amount that equals a profit for them because their system relies not on incredibly expensive components but ingenuity in design - something that compels people to buy. Microsoft and Sony only sell at a loss because they know that their system is essentially extra digits, ie processing power and rendering rate increases, only that and nothing more. For Sony to charge above the already ridiculous 600 dollars for the same ol' same ol' would be tantamount to marketplace suicide. They could not, would not succeed in convincing any but the most die-hard gamers that it was worth it. Most of us would just stick with the desktops that we already have, the desktops that the XBox 360 and PS3 practically are.

Yes, but this question is a required first step before digging into the following question: if gamers are showing a preference for undiscounted hardware, then what else is at play here? What are people paying for, if not for hardware?

I can't believe anyone is so out of touch with humanity that they even ask such questions.

The answer, my dear fellow, is that people are paying for entertainment. They don't care if the console could be wired to run the starship Enterprise. That is irrelevant. They bought a console for it's primary function: to play games which amuse them.

The hardware ONLY serves to run software. I'm not paying so I can say I own some crappy piece of silicon and ironmongery that is supposed to be the best of it's kind. I'm paying for the machine to run games I find fun.

Which leads to moronic statement #2:

That allows us to get into discussions on Nintendo's strategy (with mention of Reggie's favorite Blue Ocean Strategy book), the value of fun, the value of software exclusives, and the value of the "unique" control scheme.

This isn't exactly the author's fault, because he makes a rather common error: value is not absolute, it is totally relative.

The gamer-consumer buys consoles not because they are themselves valuable, because they aren't. They're just glorified CD/DVD players that you would do better to find a cheaper device to do that sort of thing. What makes them valuable, at all points in console history, was the games they ran.

True enough, a console must be physically capable of running said games. But while it must meet a minimum of hardware requirements to be useful to any modern game developer, more technical superiority does not mean that the games for it will be better.

The PS3 and the 360 may be technically superior to Wii. But this has never guarenteed superior gameplay. And this it doesn't guarentee higher relative "value" in the eyes of the consumer.

This was to have been a multi-part series of editorials dissecting the value attributed to the Wii versus its rivals. With hardware power out of the way entirely, the discussion would narrow to more meaningful topics.

Not really, unless we move purely into the realm of speculation. Well, sort of. We know what the 360 is capable of already; games like Oblivion have helped illustrate that. It offers backwards compatibility, and Live Arcade offers gaming of days of yore for us old-school folks.

Wii does have questionable value, yes. But so does PS3. Heck, the 360 isn't necessarily guarenteed to keep making hits like Oblivion. The best lithmus test of success for this is, as it always has been, the game lineup. Metroid, Zelda, and Mario will no doubt push sales, as they always have. The question is, other than these, what will sell the Wii? What developer or company will put a game on it that really makes it a good choice?

My guess is as good as anyone's, and the only thing I can say is, wait and see. Don't camp out to by the Wii, but don't write it off, either. Get the skinny on it first-hand, and make an informed purchasing decision.

And whatever you do, don't listen to critics. Better to do one's own thinking...

Honestly, would a 'Rational Gamer' be reading Joystiq anymore? Isn't this the same place that fired a guy for virtually no reason, and now throws out this crap?

I'm forced to agree with Tycho that this place has become a 'Retard Rodeo' -- Yee Haw!

What I find so sad, is that this guy is doing exactly the same things "economists" like Greenspan and now Bernanke are doing: blurt nonsense while including some fancy words and names of theories to give the impression of erudition. Stupidity pervades mainstream understanding of economics, and it need not be so. Just read "Economics in One Lesson" and you'll understand what I mean. Economics is not complicated, and obscure latin phrases help no one.

Beware of those who work harder at giving you the IMPRESSION they've said something meaningful than they do at actually saying something meaningful. They are pompous and stupid and are not to be listened to.

It's not that anyone has missed the point. It's not that they do not appreciate the value of a thought experiment. What has happened here is that the writer has made the assumption of "all things equal" in a market where the disparities are quite vast.

This wasn't even an admirable attempt to backtrack and pretend to make a different point.

I think you are thinking a bit too hard about this. In a free market economy, price is based on whatever the consumer judges something to be worth, end of story. Furthermore, people's reasons for placing certain values on things is going to be different from person to person. Maybe I don't play video games at all - in that case all video game systems have a perceived value of nothing to me. Maybe I don't intend to watch Blu-Ray movies. In that case my perceived value of the PS3 drops. Or maybe I don't like the type of games that Nintendo releases. In that case, my perceived value of the Wii drops. Raw processing power for your buck is just one factor of many...

Your "all things being equal" argument seems to make two points. 1; Microsoft and Xbox selling their units at a loss ensures higher sales than if they sold them at a profit. 2; If Nintendo sold the Wii at a loss, they would sell more units than at their current price. Where I fail to see your rationalle is where this argument draws a relation between the three companies. Neither Sony nor Microsoft are selling the Wii nor is Nintendo selling an XBOX. There is no theoretical "tangerine Wii" on the market. The three systems contain vastlyent hardware and have different available software. As such, the VALUE of each system varries. Rational consumers gravitate toward the greatest value compared to cost.

As for the issue of "free hardware" and just what are we buying, gamers are buyng a gaming console as a whole unit at a price relative to the cost of the hardware it contains. If I can produce a product at a cost of $5 in hardware and labor, but the public at large feels that the function of that product is worth $20, I can sell it for $20 dollars. They are not buying the hardware, but rather the whatzit I created out of it. Were I to reverse the situation and create as product using $20 worth of hardware and the public thought it was only worth $5, I would not be able to sell it at $20.

You ask, "What are people paying for, if not the hardware?" We are not paying for hardware at all. We are paying for a gaming experience. This experience includes software availability, game quality, graphics, stories and everything else one associates with the greatest of video games. While all these are things that gaming hardware provides, if the system fails to deliver, then all the hardware in the world won't make it worth a dime.

Okay. I think I get this. Lets take a look at the facts;

1) The Wii will cost on 250$
2) The Xbox 360 costs 300$ - 400$ as per core/pro packages
3) The PS3 will cost 600$ to 700$ as per package

Keep in mind that there is more to the price tag of an item than what it takes to produce it. For instance, when the Xbox 360 was released, a fair few people sold thier consoles on Ebay because supply was low, while demand was high. Even though they were not being sold at retail value, they were still being sold openly. Thus, the shortage of Xbox 360's created a demand through a lack of supply. Basic economics. Example aside, I simply wanted to provide a simple definition of supply and demand. In addition, if Nintendo were to ship only 400,000 units of the Wii, public price (as in the case with the 360) would go up to meet demand.

On one hand, all three consoles have relatively the same content. They all play games. Different games, sure, but there will still be a fair few games released cross-console. On the other hand, they are very different in core capability, showing different features and the like. These items change the way people view the product, and comparing all three consoles aside one another would give any consumer pause.

But the simple fact is that you simply can't compare the three consoles alongside one another. For one, neither the PS3 or the Wii have been relaesed yet, so we only know what little we have seen or have been told about them, and the 360 already has a somewhat sizeable user base. So comparing the value of an array of items, most of which have yet to be released to the public, is pretty absurd.

I like both Joystiq and Penny-Arcade, but both the origional JoyStiq article and the Penny-Arcade... "attack"... really didn't need to be posted. Oh well.

You are killing me, Vlad.

I was going to waste more time on another post trying to fight my way through your muddled thinking, but it really boils down to this:

This post reeks of you getting caught making a loony fallacious post and trying to backpedal and explain your way out of it, and not doing a very good job.

"I was actually TESTING you with my first crazy post in order to get to the real debate at hand, which is really just more of my special brand of handi-nomics!"

IS this another test? Is everybody but you missing the point again?

Quite frankly, there have been many comments, and because it would take hours to read them all I fear I may repeat something. Either way -

I understand, to a degree, what the author was trying to say. His theory would hold true in a world where everyone had 1000 dollars handed to them each day to do with as they please. It has long since been understood that companies take a loss when making their platforms so that they can get it into homes. However, speaking from someone who does not have an unlimited amount of funding, 600 dollars is ubsurd even if the components are worth 800 (which, it is probably more likely that the components are closer to the 600 dollar mark and that they are not really taking that big of a loss).

"More bang for your buck" is what the author is trying to get at. However, how many of you at the grocery store will buy a 4 lbs jar of peanut butter for 8 bucks when there is a 2 lbs jar sitting there for 5? Yes, math states that you should buy the 4 lbs jar because you're getting it at 2 dollars a pound rather than 2.50 a lbs. Lets consider that it is - in fact - the same brand, same style, heck, from the same batch of peanut butter (and there's something to prove this). People will -still- buy that 2 lbs jar.

Why? Simply because you can sell less at a more expensive price and sell it because people don't want more than they need. I don't need a high tech 'complete computer system' that sony uses to justify the price. I don't care if it can play new types of disks, I don't care if it has a video card worth X amount of dollars. The main reason I don't care - is because I have no idea if it is worth it. Why buy something that may never reach much use? Yeah, the specs may be great, but what if the blueray or whatever is junked for another type? And it becomes useless? What about in a few months where I can find a drive playing the same disk for 50 bucks and just put it in my computer and play it off that saving money? More to the point, why do I want a 'complete computer system' - I already have one, most gamers already have a nice computer and can play just about any game they want.

What it comes down to is - using the peanut butter analogy - is that people don't give a crap about saving 50 cents when all they need is 2 lbs of peanut butter. All I want to do is play games on a next gen console seeing the new things they have to offer, I don't care if they make a little bit of money as long as I can afford it and it'll do what i set out to do, play games.

VC, you amaze me.

In your first article you lay out the (logical) argument that if "X" is exactly equal to "Y" then the "rational consumer" should buy whichever is cheaper. This was a new concept to approximately 3% of the general populace. You then proceed to use this apples-to-apples logic to compare apples to oranges. You hid behind your claim of "ceteris paribus" while continuously mentioning Sony and Microsoft. It was abundantly clear that the article revolved around real-world products that were not remotely equal. Your whole post was either a stating-the-obvious thought experiment or a self-defeating argument.

First you protested that your comments were misconstrued, now you blog that of COURSE your argument was self-defeating! You meant to do that! Silly readers!

EVEN IF that were true, it still doesn't excuse the thinking behind your statement "[t]he ultimate profitability of a game manufacturer is no concern of ours, as gamers" (which dozens of people called you on), nor your totally baseless and rightfully maligned assertion that "subsidizing = confidence in product".

But the REALLY infuriating thing is that in your second article you admit that, yes, the subsidized vs. non-subsidized argument only works in an apples-to-apples scenario.

SO WHY DO YOU CONTINUE TO APPLY IT IN THE APPLES-TO-ORANGES SITUATION?!

Quote: "[I]f gamers are showing a preference for undiscounted hardware, then what else is at play here?"

No, no, no. By choosing the word "undiscounted", you continue to imply that the defining characteristic and main difference between the Wii and its competitors is subsidies. Everyone else knows you're still comaparing apples to oranges.

Give up, already. You're just embarrassing yourself whilst insulting your readers' intellect with your transparent attempt to backtrack.

i want those the time i wasted reading these two 'articles' back now, please.

Quidquid Latine dictum sit altum viditur.
DICK.

So the way I see this whole "all else equal" bullshit is that you're making some illogical point up that has no real application in order to stroke your own self-proclaimed genius. If that's not that case then why did you write this article? You go on to make some point that begins to sounds absolutley ridiculous and then in the end, in an effort to save some face, slap "all else equal" on the end to completely nullify any real world application, because "all else equal' is never the case.

Oh and to kill your only example of "all else equal" in the real world, the Black Macbook and the White Macbook have more than just color in difference. Make sure you do some research before you spout shit out of your ass.

http://store.apple.com/1-800-MY-APPLE/WebObjects/AppleStore.woa/wo/0.RSLID?mco=A4791B5D&nclm=MacBook
(Hard drive for the White Macbook priced at $1,299 is 60G while the $1,499 Black Macbook is 80g.)

$249.99 < $599.99
Gtfo Joystiq

What kind of "I slept through Economics class" BS is this? Dude, if you have $250 to spend on a console (or anything, for that matter), then no amount of subsidy in the world is going to make more expensive items a viable purchase, unless they lower the price to $250. You can throw around fancy Latin all you want, but the kind of pie-in-the-sky scenario you seem to be assuming never exists. Customer preference always comes into play.

Discussions like this aren't "facilitating discussion of other factors" in the popularity of one console over another. They just muddy the waters.

Actually, a rational consumer should purchase the system that gives them the largest positive difference between the price of the system and the value derived from the system. Whether the manufacturer makes a profit or takes a loss on this transaction is irrelevant to this decision.

Perhaps his main point is that the Wii simply costs too much compared to what it is. With this I would agree. His post itself doesn't make much sense.

I'll probably be getting an Xbox 360, not because Microsoft is "giving" me $200, but because I believe that's the system that will have the most support and thus the best games of the future.

Something to remember is that not all gamers are die-hard gung-ho Mario/Zelda fans. In all honesty, software-wise, that's the main reason to get a Gamecube/Wii. If you're not into those games then you're just as well, better off even, with a PS2/Xbox as most 3rd party Cube titles are ports of EA games.

RE Joystiq having agendas... We're all biased in some way, or unbiased to the point of not being biased enough (that makes sense I think) When you're heavily into gaming it's kind of hard to see the forest for the trees. Thus, we'll see what the real world thinks of these console come November. We've speculated, their money will answer.

I hadn't been to this site in a long time. I clicked throught from PA. With this kind of content it'll be another long time before my next visit.

Thank god. The less Penny Arcade fans the better.

I hadn't even read the PA response before I read this article but my God man they got it spot on.

I don't pretend to be the most intelligent man in the world and I can honestly admit that there were points in both articles where I scratched my head and wondered what the hell you were talking about, but having got the general gist of it I can say with say with some confidence that your claims in both articles were ridiculous and there rebuttal whilst a littleb frank was absolutely correct.

Took a lot of your own credibility away with that one.

And for fututre reference the reason I didn't have a clue what you were talking about was largely down to that Etonian dialect you speak in. Not everyone knows what 'Ceteris Parabis' means and I know that for me at least the only thought that that phrase brought to mind was 'What a twat'.

TO ALL:

Isn't the whole point of the editorial to get a response like the ones above? In my option(although I don't know for sure) the author was just trying to antagonize us all.

Because he knows that if we(consumers) really wanted value, good hardware, and good software we wouldn't care about getting a free lunch(subsidy). And we wouldn't argue about the marketing strategies of these console creator/sellers. We would just go build ourselves a gaming PC.

PHUCK SONY! NO WAIT! FUCK SONY! YEAH! BU BU TEH CELL! ROFL! CELL IS A COCK SUCKER BITCH. IT HAS NO DICK EJACULATION GOING FOR IT. BUT I GOTTA ADMIT BLU-RAY + PORN = OMG! BUT STILL FUCK SONY! BITCH ASS COCK SUCKING FUCKIN ASSHOLE MOTHERFUCKER DUMBASS PSYCHO BASTARD.