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Originally Posted by Phang
HIGHER PROFIT PER UNIT REQUIRES LESS SALES TO MAKE PROFIT. this is not a spectacularly complex piece of mathematics here. and the discrepancy with profit per unit compared to Sony/Xbox may well have been larger than the discrepancy in sales (although I really doubt the Xbox, and most certainly the PS2, didn't themselves make a profit)
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false economy.
that equation can only be true given certain variables stay within defined limits. yes, selling smaller quantities at higher prices will make you decent profit, but do you really feel enough people could have been persuaded to pay the higher price to validate your argument in a world so fueled by 'cheaper is better'?
Don't be dazzled by high numbers, in order to make profit they have to recieve back everything that went into development & research, cover all staff costs & wages, pay for the manufacturing and in short keep all their debitors happy before they can see any sort of return on the product.
So few companies actually run in the green, just about all the economy of the world is run on credit.
The fact that they
had a projected sales figure means they predicted they would have to fall within a margin of that amount to profit from it.