A video game system producer has just finished developing a new gaming system, System 2, and you

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A video game system producer has just finished developing a new gaming system, System 2, and you are tasked with determining the optimal release strategy. In particular, should it offer only one version, and if so which one: the current System 1 or the new System 2. Alternatively, should it offer both systems simultaneously?

The firm’s market research team produced the following numbers regarding willingness to pay for the two systems:

		WTP for:
USER TYPE	# USERS	SYSTEM 1	SYSTEM 2
Low-end user	8 million	300	600
High-end user	2 million	800	1200

The estimated production cost of System 1 is $200, and for System 2 is $400.

Determine the firm’s optimal course of action and pricing strategy.

Posted Date: Oct 19, 2021 01:54 AM

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A video game system producer has just finished developing a new gaming system, System 2, and you

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If only system 1 is offered If it is priced at 300 then all users 8 2 10 million would opt for it an... View the full answer

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