| Mergers are Satan Clause's tools of Doom and Destructionism... by archmagi1 |
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I read today that Namco and Bandai decided to “Join Forces.” Sure, this sounds good on the surface, but what does it really mean? I’ll tell you: HIGHER PRICES!!! Proponents of our current distorted capitalist economy would say, “Hey, they are just fulfilling the American Dream!” Sure, they are making ass-loads of money, which coincidentally is the American Dream, but they are also eliminating competition. Competition is the mainstay of a well functioning free market economy. Having tons of competitors prevents companies from winning board games (aka becoming Monopolies), and it also brings down prices. What is a monopoly? According to Wikipedia.org, “In economics, a monopoly (from the Greek monos, one + polein, to sell) is defined as a persistent market situation where there is only one provider of a kind of product or service. Monopolies are characterized by a lack of economic competition for the good or service that they provide and a lack of viable substitute goods.” Let’s break this down. One provider of a product or service means that only company X produces those widgets you so desperately need. Company X can charge ever how much they damn well please for the widgets, and you as a consumer can do nothing but cry about it because X is the only supplier. Also, monopolistic industries are defunct of innovation. Look at Microsoft. Although they aren’t a textbook monopoly (the competition in any of their markets is mostly negligent), they are enough of one to be used as an example. I recently gave a pro-Open Source Software presentation, and some of the data that I discovered was that since MS’s last major Internet Explorer upgrade (The SP2 popup and ActiveX blocker), companies like the Mozilla Foundation or Opera have been integrating numerous new features into their browsers. But MS’s market share makes these competitors almost negligent (though tabbed browsing is rumored to be in IE7), so essentially, corporate sabotage (spyware and popups) caused MS to innovate instead of industry competition. The next part of the monopoly definition is the lack of viable substitute goods. Company X makes widgets which are easy to scale to many different machining processes, and because of that a widget is in almost everything. Company Y makes a hoozamawhatchit, which is a widget alternative in telephones. Now X’s widgets are used in more than just phones, so what about in televisions? Y’s hooza is too expensive to scale to television applications, so though a possible competitor exists, X retains the monopoly. Another example, and perhaps a more relatable one, is that of MS in the operating system field. Now don’t any of you GNU/Linux’ers out there bite my head off just yet. Winblows… err Windows is essentially the reason MS monopolizes the commercial PC market. Sure, various ‘nix distro’s are available for reasonable competition, but unless a techie intervenes, the average user isn’t going anywhere near the alternative. Lack of a viable alternative is what keeps only XP on Dell’s webby. Now don’t go and point out that my 401 word explanation of a monopoly doesn’t apply to a merger in a saturated industry, I know that already. My point exists in the recent trend toward a monopolistic videogame industry. Oligopoly (few suppliers or few alternative products) industries are just as bad as a monopoly, and that is exactly what the game industry is turning into. Oligopolies exist as monopolies, but with a bit of competition to leverage prices and supply. How many different “major” game companies are left out there? I can’t really think of too many: Vivendi/Universal, Square/Enix, Acclaim (oops, bankrupt), Midway, EA, Namco/Bandai. Our once supersaturated market is narrowing to a small group who will ultimately raise the price on games. A thing I noticed last night was a commercial for MLB 2k5. It touted that the game was only 19.99 for the best Major League Action. Sounds great, but what if it wasn’t the best or what if the company selling the twenty dollar games doesn’t get a license for a certain sport. Tough luck! We’re going to have to pay whatever EA decides they deserve. Exclusive contracts with the NFL and NCAA have done for EA what may happen for the entire industry. EA can now say, “Hey, no one else can make a football game with official team names or players or reasonable likenesses without elements of satire or parody. Why don’t we charge our patrons 55 dollars this year?” And what can we do as consumers? Nothing but play our good ol’ NFL Football ’94 (starring Joe Montana) and lament that we can buy a baseball game for 20 bucks but must pay almost three times as much for a current football game. That is the nature of mergers. They reduce consumers’ buying power by jacking prices and decreasing supply. Soon, we’ll be stuck with 60 or 70 dollar games that are the same old thing with new graphics (that’s another rant entirely…) and won’t be able to do anything about it. Well, we can’t do anything about it anyway short of buying a sizeable number of shares in our favorite companies to keep them from selling in merger situations! Hell, they can still reach the American Dream, but by selling tons of cheap games.
archmagi1 is a poor redneck who hates it when companies merge and raise prices.
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