Sunday, May 8, 2011
The Death of the Playstation?
In case you missed it, the online system of the Playstation --Playstation Network, or PSN-- was hacked in the last week of April. It was a big fiasco, as thousands of credit card numbers and various other forms of user information was stolen, and Sony had to shut down the PSN entirely, leaving many people without a way to watch movies or play video games. However, what's worse, recent reports indicate that much of the information has been released by the hackers online, and Sony announced that they would not be able to re-initiate their online system until a later, undefined date. How does this relate to economics? It's a prime example of a situation that would cause people to substitute products. Commonly, the theory states that a person will replace a product they are purchasing for something less expensive, and sometimes inferior, especially if their income changes suddenly, but what happens in a situation like this? Surely, some people will temporarily, if not permanently, move to another medium of entertainment, inferior or not. Surely, Microsoft will see an increase in users of the Xbox and their online system, or Nintendo, with their Wii and online system. Basically, the sudden lack of demand for the Playstation is leaving a vacuum that will naturally be filled with the supplies of the video game alternatives available. A similar situation seen in the past would be the situation that Peter Pan Peanut Butter found themselves in a while back. Reports of Salmonella kept popping up due to consumption of that Peter Pan brand. Naturally, people replaced the Peter Pan Peanut Butter they usually purchased with another brand of peanut butter, at least until the Salmonella scare had passed, but I'm sure some people ended up finding themselves fancying their new peanut butter from then on, whether because of continued fears of illness, or because they preferred the taste. So, too, will some people permanently drift away from their Playstations.