Have you heard of F1? Do you know what it costs to just watch the F1 legally on streaming? have you ever wondered who goes to watch an F1 race when they completely shutdown a city for everyday people (like Las Vegas or Montecarlo), and how much the tickets cost?
It’s called value-based premium pricing, and companies couldn’t care any less about how much any of us think it costs to make the thing they are selling. They are simply charging the lowest price that their highest income target demographic is willing to pay. If you are not going to buy it, it doesn’t matter. You weren’t the target anyway. The people with tons of disposable income and a very high nostalgia induced perceived value for the cartridges are. You and I, we are rounding errors, we don’t matter. A single buyer is worth 20 people like you or me., they make up the difference by a long way.
Same way the F1 doesn’t care that Average Joe, or the other 100 thousand people like him, can’t afford a ticket for Las Vegas Grand Prix. The few one or two thousand high wealth targets can cover the difference. And they are not limited by living in Las Vegas or in Nevada. Wealthy people from all over the world will fly their lush private planes or first class seats to get there.
Same way free-to-play games don’t care about the complaints from the credit grinders. They only care to keep the whales happy. So on and so for. Value based pricing is the wet dream of CFOs and CEOs. It is the number one strategy that businesses turn to as soon as they have a captive market, it is the one they turn to when they are trying to maximize profits in a declining market, it is the one strategy that spears head enshittification. Why sell one million $1 copies when you can sell 20k $300 ones?
This is why “vote with your wallet” is a dumb thought terminating cliche. Your wallet-vote is worthless for companies, if on the other corner there’s a smaller, less vocal, but more willing to pay group. That’s why companies charge $100 for a download of a video game that might or might not work and don’t even blink when people complain.
Have you heard of F1? Do you know what it costs to just watch the F1 legally on streaming? have you ever wondered who goes to watch an F1 race when they completely shutdown a city for everyday people (like Las Vegas or Montecarlo), and how much the tickets cost?
It’s called value-based premium pricing, and companies couldn’t care any less about how much any of us think it costs to make the thing they are selling. They are simply charging the lowest price that their highest income target demographic is willing to pay. If you are not going to buy it, it doesn’t matter. You weren’t the target anyway. The people with tons of disposable income and a very high nostalgia induced perceived value for the cartridges are. You and I, we are rounding errors, we don’t matter. A single buyer is worth 20 people like you or me., they make up the difference by a long way.
Same way the F1 doesn’t care that Average Joe, or the other 100 thousand people like him, can’t afford a ticket for Las Vegas Grand Prix. The few one or two thousand high wealth targets can cover the difference. And they are not limited by living in Las Vegas or in Nevada. Wealthy people from all over the world will fly their lush private planes or first class seats to get there.
Same way free-to-play games don’t care about the complaints from the credit grinders. They only care to keep the whales happy. So on and so for. Value based pricing is the wet dream of CFOs and CEOs. It is the number one strategy that businesses turn to as soon as they have a captive market, it is the one they turn to when they are trying to maximize profits in a declining market, it is the one strategy that spears head enshittification. Why sell one million $1 copies when you can sell 20k $300 ones?
This is why “vote with your wallet” is a dumb thought terminating cliche. Your wallet-vote is worthless for companies, if on the other corner there’s a smaller, less vocal, but more willing to pay group. That’s why companies charge $100 for a download of a video game that might or might not work and don’t even blink when people complain.