ORIGINAL: GeneG
Its the market that drives the price point. Not the individual. As much as you want it to be $100 because that it what you feel its worth, the market says otherwise. All RC Flight sims are in the same price range. Do you think that is just a coincidence?. Thats the price the market settled on. They will make money on FS One selling it at $209 (or $200) because they know that people have already bought other sims at that price and they think that FS One is a better product.
I know its hard to swallow but the idea is to make as much money as you can, not just enough. When you price a new product for market you always price it high for two simple reasons. People will pay a premium to be an early adopter and you can ALWAYS lower the price (you can NEVER raise it). You want to price a product so that a small percentage of your customers complain about it and don't purchase it. Being in that situation means you priced the product right and are getting the best return on your investment through the majority of your customers that are buying it.
If it was your product and your R&D money that went into it you would do the same exact thing. Don't fool yourself into thinking otherwise.
It is not that I *want* it to be $100. If it was based on me, I would want it to be $20.
My point is that at $200, I'm not a buyer. At $99 I would be. Apparently there are many other as well. How much revenue is getting left on the table?
I agree with your point that newer products are always priced higher. I also have to point out that some of these flight sims aren't so new anymore.
As far as it being my R&D money, I would definitely want to get it back along with my profit. However, I only care about the per unit price as it relates to how many units can be moved. One buyer at $4M = Two Buyers at $2M..etc. I'm more concerned about how many buyers I think I got out there and how does the math work out after that.
Of course you could argue that cutting the price 1/2 may generate twice as many buyers but result in the same revenue. This is true. But when you release a $20 add-on, you now have twice as many potential buyers which has a greater upside.