[somenameforme]

The article is complete and utter nonsense, probably intentionally so because it's the type that will drive engagement. The reason planned obsolescence is insidiously effective is precisely because the typical consumer does not take reasonable account of product longevity. You can easily say 'yeah I like how bright [or whatever else] this bulb is' but lifespans are scarcely taken into account. If they were then massive swathes of the market wouldn't exist - a typical example being the $20 coffee makers which you'll end up paying way more for than a decent one due to the fact they just constantly break.

And all cartels are obviously built around maximizing income, so I don't understand what 'illegitimate reasoning' would be. The same thing is still certainly happening today, but without the paper trail. A clear example of it is in the video game console industry. All the way up until the PS3 era of consoles, both Microsoft and Sony were heavily subsidizing their hardware. The video card in the original XBox was worth substantially more than the retail price of the system itself.

Then in the PS4 era they both stopped, at the same time and started releasing consoles in mid-range retail hardware with minimal subsidization. That makes 0 sense from a competitive point of view. If your main competition stops subsidizing their product, that's the exact time you subsidize harder than ever and claim the market for yourself. But it makes perfect sense if a couple of c-levels happened to have a chat and casually mentioned that ending the subsidization battles would end up being vastly more profitable for both of them. 'Yeah, I agree.'

[mathgeek]

Regarding the PS3 specifically, that was the breaking point for subsidizing because it ended up being famously and heavily used for compute clusters. We see the same effects today where any chip useful for high end gaming is also useful for AI.

[somenameforme]

While true I expect this likely paid for itself many times over in indirect advertising. People using PS3's as supercomputing clusters was phenomenal advertising for the PS3 that was a generally mediocre system for gaming. It seems that Sony was betting everything on dev's bending over backwards to maximize the system's highly unique hardware and leaving ports to other systems working as second rate citizens, but instead the exact opposite happened. The PS3 did poorly, but I think it would have done much more poorly if not for things like the compute cluster 'marketing.'

Their mistake wasn't the subsidization but launching with extremely esoteric hardware.

[mathgeek]

I dunno. At the end of the gen Sony had lost a billion dollars on the PS3 last I read about it.

[somenameforme]

They lost money on the console itself, but were already profitable after accounting for software, accessories, and so on by 2008. [1] The console was released in late 2006 and was a beast of subsidization in part because of the heated blu-ray/hd-dvd war which now seems quite quaint. The modern business models are just really taking the consumer for a ride.

If either company maintained the previous business model, they'd have made the competitor look like a clown. It was basically a prisoner's dilemma, but they both chose to collude. It's hard to explain that without assuming that they're colluding, which is basically a tautology.

[1] - https://www.gamespot.com/articles/hirai-claims-ps3-platform-...

[mathgeek]

AFAIK the profitable quarters your link refers to were after they made all the hardware changes that rolled back the decisions we’re talking about. Wikipedia has many source about it from the main article and highlights the one you linked.

As an aside, I don’t really care about the collusion claim.

[pie_flavor]

If you put numbers on a package, the consumer will choose the bigger numbers. Taking some statistic out of context like "the typical consumer does not take reasonable account of product longevity" doesn't make sense when the only two things a lightbulb can do better are 'be brighter' and 'last longer', and both are prominently displayed on the package. The typical consumer does not pick coffee makers based on longevity because the coffee makers don't put longevity on the package, they put the number of feature buttons, and then the consumer chooses based on that instead of inferring or researching a longevity, and the actual takeaway is that consumers are bad at inference. And on this you call the article's extensive description of how lightbulbs work and how lifespan trades off with efficacy 'complete and utter nonsense'?

The video game system analysis is junk too. No, Sony and Microsoft are not in a cartel, you can tell by how they're in vicious competition with each other and Sony's winning. Assuming similar moves made at similar times is obvious proof of collusion is assuming that one party's move was just picked out of a hat, rather than market incentives prompting this move and applying equally to both companies causing both to come to the same conclusions for the same reasons. The actual reason the level of subsidization dropped, which you can find by googling for five seconds, is because they switched from bespoke hardware stacks to standard PC components, which were cheaper. No, you do not make the stupid financial move of making your hardware stack even more expensive just because your competitor made theirs more efficient.

[somenameforme]

The level of subsidization has nothing to do with hardware customization. You can have subsidized retail hardware or customized hardware sold at cost. They both went from high end heavily subsidized hardware to mid-range minimally subsidized hardware at the exact same time. Colluding in this way means they both dramatically increase their profit margins, and obviously does not preclude competition in other aspects.

Though they are also overtly colluding in other areas. For instance console exclusives used to be a major selling point, but they greatly empower studios to the consoles manufacturers detriment. The PS1 and PS2 had around 500 exclusive titles each. By the PS3 we're down to 174, 49 for the PS4 and now we're down to 26 in the PS5 era. Microsoft trends similarly and it was a strategic decision, to the point that they made a big announcement recently about returning to exclusives. As if the idea of having a competitive edge is some novel or revolutionary concept.

[pie_flavor]

It is not proof of collusion that they abandoned bespoke hardware right as consumer hardware was getting good. That is exactly when you want to abandon bespoke hardware. It is not proof of collusion that neither one lowered prices for the cheaper tech. Both were trying to appease shareholders who were sick of the massive up front capital investment that heavily subsidized hardware caused. Again: both had the same incentives, and so independently came to the same conclusions. If they were colluding, Xbox wouldn't've declaratively lost that generation, and with the department on fire today and in danger of being restructured, Sharma would right now be executing one of these strategies you are saying is a smart idea.

The world is not full of conspiracies. You will understand it much better if you look for the actual reason things happen.

[somenameforme]

Since you're ignoring words and just repeating the same fallacies, I'll respond in bullet point format to make it easier for you to read:

- Retail vs customized hardware has nothing whatsoever to do with subsidized or not. You can have subsidized retail hardware, or custom hardware sold for profit.

- Agreeing to collude on one issue that is mutually beneficial does not preclude competition in other ways.

- There have been tens of thousands lawsuits related to price-fixing and other anti-competitive behavior by corporations, and an unknowable of actions that were carried out with no consequences whatsoever, like this one. It happens constantly, because it's highly profitable and the consequences even when caught tend to be negligible.

---

Back to words: Sony and Microsoft were in a prisoner's dilemma with regards to subsidization and high end hardware. If they both collude, then they both see major profit increases and live happily ever after. But if either of them actually competed then they'd end up crushing the other one and take the market, at least in large part, for themselves.

In a competitive environment, this is precisely why you saw heavily subsidized high end hardware be the norm for consoles for decades. Neither could risk the possibility of not subsidizing. Then suddenly Microsoft and Sony stop doing so at the exact same time. It was both extremely overt but also impossible to prove so long as they didn't leave a paper trail.

[pie_flavor]

"You're ignoring what I said", says the guy who proceeds to repeat himself ignoring what I said.

> You "can" have subsidized retail hardware

But neither corporation's shareholders wanted them to for capital reasons.

> or custom hardware sold for a profit

But that'd be an insane waste of money for a platform that's more inconvenient to develop for.

> Agreeing to collude on one issue that is mutually beneficial does not preclude competition in other ways.

But when you're in danger of going under, it's time to stop leaving cash on the table properly, especially when you will win a bidding war.

> There have been tens of thousands lawsuits related to price-fixing and other anti-competitive behavior by corporations

But not against these corporations in this context.

> you saw heavily subsidized high end hardware be the norm for consoles for decades

Because in that span of time it was a good idea: they had lots of cash and were pushing the envelope of what hardware was capable of.

> Then suddenly Microsoft and Sony stop doing so at the exact same time

Because in that span of time, it stopped being a good idea: PC hardware had started being ahead of what they could offer. And you are calling an eleven year period "exact same time".

> extremely overt but also impossible to prove so long as they didn't leave a paper trail.

In other words, you have literally zero evidence this is true and are just going off of vibes, even though as I've just laid out, everything that happened is exactly what you'd expect to have happened if they weren't.

[mathgeek]

> a typical example being the $20 coffee makers which you'll end up paying way more for than a decent one due to the fact they just constantly break.

I chuckled a bit realizing that you probably meant a decent coffee maker to cost far less than what I think a “decent” one does. Took me a moment to shake “you could buy a $20 machine every couple years for decades before you break even.”

[somenameforme]

Yeah a genuinely nice machine is going to set you back plenty, but is built to last forever and can be easily repaired to achieve that. On the other hand a French Press costs like $10, lasts forever, and makes an amazing cup of coffee. But the $20 coffee machines are basically just a scam, but one that works because people just don't appropriately weight longevity.

[somehnguy]

I don't know if $20 coffee makers are really a scam. I've been using my $20 Mr. Coffee for like 5 years now without an issue, still makes coffee and more than likely will for a long time.

You might debate the quality of the coffee it makes, but I've long since learned I don't have the palate for it to matter.

[kalleboo]

Yeah I've never had a $20 coffee maker or toaster die, they're too simple to have anything go wrong. It's always been when I splurged on a slightly fancy one it has broken, since they add a bunch of crap that can now go wrong.

[somenameforme]

Toasters I agree with, though I use my toaster very rarely so I'm unsure if that's the nuance. But the coffee makers, cheap coffee makers would have the heating plate fail constantly. And by contrast I'm a 1-2 pot a day person and tended to leave the pot warming, so it's getting used a lot. They still shouldn't fail though.

It's similar to my experience with cheap electric ovens. In that case I'm skilled enough to repair them but there is overt planned obsolescence with the wiring being designed in a way that corrosion and failure is inevitable. It's quite an easy repair-job since it just requires fixing a corroded wire, but the case itself is built in a way that makes it a complete PITA to do. 15 seconds fixing the wire, 15 minutes disassembling/reassembling the casing.

[brookst]

There are a lot of people for whom the choice is not “spend $20 every two years, or spend $200 today and never again” but instead “spend $20 today or just not have a working coffee maker”

[zimpenfish]

cf Vimes' theory of boots[0] which is basically the same point.

[0] https://en.wikipedia.org/wiki/Boots_theory

[somenameforme]

Again I don't really think many of these concepts really apply any longer. I'm currently wearing $10 Chinese knock-off shoes that are lasting for years comfortably, while there are plenty of low income types running around in Air Jordans because of marketing.

This is part of the reason I have a bit of a personal crusade against marketing and advertising. I think its currently one of the main things that is realistically keeping the poor poor. Endless creation of artificial demand and instilling false hope about what 'luxury' goods would do for a person is just screwing over poor people. Some hip hop and other stuff has started going down this track [1], but it's still outvolumed a few hundred times over by the culture of glorifying being exploited by corporations.

[1] - https://youtu.be/QK8mJJJvaes?t=151

[somenameforme]

There needs to be a term for this argument, because I think it's frequently used but generally fallacious and primarily used to defend the indefensible. It's a sort of strawman, in that you're concocting some demographic as something being reasonable for even though that demographic either doesn't exist, or exists in negligible quantities. The pitifulman?

And on top of all of this - again, French press. Cheaper than coffee maker and makes better coffee than a coffee maker. Are we to now invoke the same pitifulman again and claim that there's this same demographic that can't afford anything, yet works so much that even the extra 2 minutes you'd spend with a French press in impossible for them and their 7 part time jobs?

I mean FFS we live in a world where you can earn $20/hour frying frozen precut fries at McDonalds.

[mathgeek]

… but what good is a french press without a $200 gooseneck kettle? :)