[quote name='dallow']Oh that's right, I forgot about the people who buy crap like $3 ringtones, and $5-$6 POS cell phone games.
These prices suddenly make a little more sense.
Guess I'll be staying away for a long time.[/QUOTE]
Products like that are kind of like the roses you see at the gas station, or the candy bars at grocery stores. They're "impulse buy" kind of situations. In terms of programs from online delivery, they depend on the impulse purchase for some sort of value creation for the customer ("wow, I just bought a game that I can play right this second for $5!"). However.. 30 seconds later.. the fun runs out. Hell, with many ringtone and cellphone .jpg services, they subscribe you to a monthly service and the consumer wouldn't know unless they read the fine print. That's what you call deceptive marketing practices.
Now.. for these VC games. Nintendo, as with many other companies, took a look at online content delivery to formulate a pricing scheme. Why do people pay for overpriced games and features elsewhere? A little something called the "uneducated consumer." Nintendo (and Microsoft by the way) seek to blur the effects of buyer's remorse by removing pricing by currency, and instead opting to price by a points system.
The VC depends a little bit on the impulse purchase. However.. 3 or 4 of those impulse purchases add up. The VC has a broad target market, but among it are the "I haven't played a game in 20 years" crowd. Say this uninformed user goes onto the VC. They see a game they "think" they recognize, and decide to plop down the points for it. They play it for 30 seconds, and realize that they bought the wrong thing. These gamers stop buying VC games, and only the hardcore market supports it. Soon enough, they won't be meeting sales expectations, and the VC becomes less cost effective.
Cheap Ass Gamer is what you could partially call a consumer education service, and depends on the laws of free market econmics to provide us with cheapass games when supply theoretically exceeds demand in retail inventories, thus creating clearance prices for us. The XBLA and VC systems are sort of micro command economies, in which content prices disregard demand and pull a magic # out of the air. Hardcore gamers ARE NOT the majority user base for this medium of entertainment. Therefore, if the user base becomes alienated and disenfranchised from the service, it is no longer profitable for the parent company.
But.. it isn't going to go away. Especially in the case of Nintendo.. the costs of development, hosting, and delivering the content are so miniscule-while the number of uneducated or obsessive compulsive fans willing to throw away their money is high enough- they have no reason to restructure their pricing model. At least Microsoft lets you demo the thing first though, so you at least know something about the product you buy beforehand.
Yeah, I cringe at the thought of buying NES Baseball or any game that has been rereleased through multiple mediums in the past at $5 or above (then again, I've been an avid emulation enthusiast for years as well). However, Nintendo's a corporation that does what any corporation will do: try to generate revenue to increase shareholder value. Do I think they are creating a bit of dead weight loss due to overpricing based on convenience and the impulse purchase? Well yeah, of course. However, it isn't just Nintendo doing it. Blame the millions of uneducated consumers who place an inflated value on the convenience of online content delivery to cause median price points such as this. Sometimes, the market is just stupid (just look at SpongeBob TV plug and play games as an example).
OP, as a sidenote, I give you props for at least having the balls to speak your mind and post it here for discussion. I agree in some points, but you achieved the goal any author or journalist should aim for in his writing (and the length of this thread is proof, minus the chivalric knights ready to flame in the defense of Nintendo): thought provocation.