Can everyone please stop claiming and speculating that Valve’s new hardware will be loss leaders? If you watch LTT and Gamers Nexus’s first videos on the announcement, they actually spoke with Valve’s engineers. And the Valve representatives already said that the new hardware WILL NOT BE LOSS LEADERS.
There isn’t even evidence that the Steam Deck was a loss leader. All GabeN said was that the lowest cost launch model was priced “painfully”, which doesn’t necessarily mean it was sold at a loss, it could easily have been sold at a very tight margin.
And no, low margins does not meet the definition of a loss leader. A loss leader is a product sold below cost, in that every unit sold actually costs the seller money.
I get the desire to speculate on new hardware. It’s fun and it helps pass the time until we hear more info from Valve. But there’s limits to what is reasonable. Valve has already stated that the new hardware won’t be loss leaders, so hoping and/or claiming they are isn’t reasonable.
Sorry for the rant, but all of the comments that seem to have only skimmed headlines are quickly getting to me
What the hell is a “loss leader”?
When a business sells something at a lower price than it costs for the purpose of attracting more customers.
Another example is Costco rotisserie chicken.
Gilette gives away razor handles to men to encourage them to buy their blades.
Inkjet printers are often cheaper than a change of ink cartridges.
I think it was Standard Oil, gave away hurricane lanterns in order to sell kerosene.
Most video game consoles are sold for less than they cost to make because the company expects to earn more in video game sales.
A product sold at a loss to attract customers who hopefully buy other products with higher margins that result in a net profit for the retailer.
An item that is sold to you at a loss in hopes that you buy more profitable stuff from them to make up for said loss. Game consoles are usually sold at a loss in order to get people into their ecosystems, so they can buy things like games and subscription services, which are more profitable.