this post was submitted on 03 Dec 2024
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All retail establishments utilize loss leaders. It's not some underhanded duplicitous tactic, it's just a common business strategy
Loss leaders that lead to buying other things that lead to overall profitability for that section of the business.
This entire division is operating at a loss. Point isn't that it is unusual or underhanded. It's that because of the way the division is currently run it is not a business model to point to as being sustainable.
Well yeah, fighting for market share against an entrenched monopoly isn't cheap. That's not a reason to cheer on the monopoly though.
That's not what the conversation was about. It was about whether the business model is actually viable.
If the business of that section is turning a profit it lends more support as opposed to being seen as a side project that doesn't need to turn a profit. Which is why I included GOG into the mix, since Microsoft and Epic are huge companies with alternative revenue streams.
No it wasn't. We were taking about streams monopoly status and epic being one of the few alternatives.
YOU were the one trying to deflect the conversation into business viability. Which your entire side tangent really only reinforces how obscene the monopoly hold off stream is, that trying to break into the market is so expensive.
If the point of cuts is given then business viability is quite important. Especially when it raises questions of whether GOG could sustain a lower cut. Those options you provided like Microsoft and Epic are multibillion dollar corporations capable of burning through money endlessly.
Do you know why 30% was chosen? It was the typical cut retail took. Physical stores selling goods take that much to cover their lease, logistics in moving those good to the store and employees.
Online stores do not share most of those costs. 30% is not needed.