[quote name='epobirs']I thought I'd already made it clear that bundled games, especially on extremely inexpensive optical media, cannot be factored at SRP of the game at release.
So, a month after the bundle is released Mario Kart
D becomes a $30 Player's Choice title. Does the GC miraculously regain $20 of value?
Nor should you neglect that Nintendo sells the extra controllers at a good profit. A bundled unit cannot be measured at SRP in terms of its cost to Nintendo. That cost is greater than a bundled game but nothing like the retail SRP which also includes a profit margin for the retailer.
The analyst's name is P.J. McNealy. GameSpot should know this. He's been covering the console sector longer than most GameSpot employees have had pubic hair.
http://www.gartnerg2.com/bios/bio_pmcnealy.asp
Bundles are not the same thing as price drops. In fact, they are specifically a manuever to avoid a price drop. The losses associated with a bundle are temporary and can easily be rolled into tax time considerations. The important part of this is that bundles have end dates at which point the freebies stop but the price remains the same. This gives the poducts manufacturer more options than a straight price cut that is unavoidably permanent. A company could lower and raise the price of their product if they chose but it would be suicidal. It is far simpler to temporarily give away something with a perceived high value for end users but minimal cost to the company.
Of course, that high perceived value is a fleeting quality. If a bundle is successful the market tends to become flooded with the game and loses most or all of its retail value. This is one reason to keep bundles relatively brief rather than creating a 1:1 attach rate as seen in the days when new systems shipped with a bundled game.[/quote]
What if the new PS2 model drops to $129? Then the gamecube is facing a price drop as indicated, with the possible bundle also.