resistor
First Post
I think we're waaaay overthinking the loss leader analogy.
The concept of loss leaders originates in the world of physical merchandise, where there is a (relatively) quantifiable cost-per-unit. In that scenario, it's pretty easy to say that a loss leader is a product sold at or below cost with the goal of encouraging the sale of other products with higher profit margins.
This is somewhat skewed when talking about the digital realm, since it's impractical to quantify an actual cost-per-unit. However, I think the spirit of the decision is the same: they are choosing to sell the PFRPG PDF for well below what they could be selling it for (the price the market would bear/the optimal point of the price-demand curve) in order to spur the sales of other, higher margin items, including the print version of the same book, as well as future splat books, the adventure paths, modules, merchandise, etc.
Arguing about whether it's a loss leader in the technical sense of sold-at-or-below-cost seems like missing the forest for the trees.
The concept of loss leaders originates in the world of physical merchandise, where there is a (relatively) quantifiable cost-per-unit. In that scenario, it's pretty easy to say that a loss leader is a product sold at or below cost with the goal of encouraging the sale of other products with higher profit margins.
This is somewhat skewed when talking about the digital realm, since it's impractical to quantify an actual cost-per-unit. However, I think the spirit of the decision is the same: they are choosing to sell the PFRPG PDF for well below what they could be selling it for (the price the market would bear/the optimal point of the price-demand curve) in order to spur the sales of other, higher margin items, including the print version of the same book, as well as future splat books, the adventure paths, modules, merchandise, etc.
Arguing about whether it's a loss leader in the technical sense of sold-at-or-below-cost seems like missing the forest for the trees.