Nintendo calls EU's $234m price-fixing fine 'illegal'

The problem is that artificially higher prices mean that people who would have bought the system don't, and those that do get less benefit out of their purchase. The point is that a firms' objectives (i.e. maximising profit) gets in the way of maximising welfare in society. I could explain it better using a diagram, but I don't know how to use ASCII :P

You really don't understand what's going on, do you? Nintendo's guilty of restricting the exact thing you're claiming that this lawsuit is damning them for.

Nintendo wasn't allowing retailers to sell the game for different prices. They'd exerted their pressure (by not supplying retailers who broke the rules with merchandise.) so that anyone who sold the game at either a higher or lower price than Nintendo's stipulated price were punished.

It's the exact opposite of the free market. If demand wasn't high, you weren't allowed to lower the price. If demand was high, you weren't allowed to raise it.

That's what the "fixing" in "price-fixing" refers to. There's no fluctuation, because Nintendo locked the price.

There is such thing as an artificially high price. Nintendo can restrict output of their product and operate where supply and demand do not meet in order to receive higher profits. By doing so, they're interfering with the free market and pricing systems. It's a little something known as the deadweight loss of monopoly.

@jswanson:
I can't agree to what you are saying. First off: You bought a Wii launch day, waited in line several hours. That's not what I call a regular purchase. Demand doesn't include only hardcore fans that are willing to make sacrifices for their hobby. In Europe there was a shortage due to demand right after the launch but that ebbed down a couple of months afterwards and now you can get a Wii basically everywhere right away. In the US the picture looks a little different. There are reports of people trying to buy Wiis and there were multiple consoles in the store but they were send away and told only one console per person and if you know the guy next to you that's a group and you can get only one for all of you.

I can't believe that Nintendo one of the leading game manufacturers for the last 20+ years did underestimate the demand in the US but is able to supply other important market segments. Nintendo knows that Microsoft is protecting it's turf with all they've got. The reason why there are no Wii's in the US (yeah call me names) is that Nintendo doesn't deliver enough consoles even though they could. Just the fact that it is not available makes the Wii that much more attractive.

All the while your economics are not much better, where is the difference in middlemen between Amazon US and Amazon GER? It's the same group ergo same negotiations for merchandise quantities. Even if you add taxes, lots of regulations and other costs into the margin you'd still not get such ridiculous differences even with the high exchange rate. It's plastic discs, made in Taiwan, packaged in China, shipped to the US and Europe (both in opposite directions about the same distance). The only reason why in one place they are cheap and in the other they are expensive is because they play a game with their customers. The US market is dominated by the Xbox360 (at least when it comes to penetration rate and user loyalty) hence Nintendo has to go competitive and sell things cheaper. Europe on the other hand is not yet HD ready in most places and the Wii got a spectacular reception thus washing in more profits. Raise the price in the "good" market and you are rich. That's all there is. One of the reasons why I'm so upset about this is that so far you couldn't see what's going on. A game just came out you didn't know about other countries and paid what they wanted for it or not.

Now I can do price comparison on a global scale within minutes and look at all the different prices for the same product and only then realize that we've been screwed over all along.

... and Sony.

If anyone out there is naive enough to think that any corporation has their best interests at heart, then I guess they're the perfect customer (AKA: bitchable).

Except Sony's never been dinged for the anti-competitive practices Nintendo and Microsoft have been convicted of.

Yeah, Sony's still a corporation who's trying to get as much of my money as possible, but for the purposes of my comparison, I was making a direct parallel, that's why I left Sony out.

I'm not talking about producing the maximum physically possible, I'm talking about producing a socially optimal amount. Basically where supply and demand cross. Monopolies can restrict output and leave an excess of demand.

It's inefficient and results means that too little of our scarce resources are being used for production of the monopoly's product.

"...rabbid Nintendo fanboys..."

DAAAAAAAAAAAAAAH!

(sorry Will, had to be done ^_^ )