The Razor-Razorblade model

When you purchase a razor, you get razorblades with it. This is assuming you don’t use a razor knife or those cheap ones with no exchangeable bits. The razors are not sold to make a winning. There are luxury models, but I’m actually using one I bought more than ten years ago. How is Gillette still making money from me? With the blades. The razor blades are what makes the sales and brings in the profit.

Essentially, you sell one item to sell the other, and the two complement each other.

The video game industry is all about this with few twists. A console is designed to play a game, it is the razor to which you buy the razor blades, the games. The console in itself doesn’t matter a whole lot, except that it needs to have a large amount of customers in order for the console and other complementary games to be relatively successful. Third party games may be system sellers at times, but how first party games are always measures is how they sell the console. Super Mario Bros. is a franchise that is an example of first party game that sells consoles. Splatoon is a failure, because it failed to sell the console to the masses, but it sold reasonably well because there is a starvation of equally reasonably good games on the Wii U. We’ll have to see how Super Mario Maker does.

Microsoft banked on Halo as their first party sales title, and it was reasonably successful at first. I had to check whether or not Halo 4 had already been released, because nobody is talking about it. You still see people mentioning Halo 2 and 3, but the fourth one is never a topic. Currently it seems the only one that has sold any Xbone’s is Killer Instinct, and even that has a specified audience with the fighting game crowd. We’re not living in the Street Fighter II era anymore, where anyone and their mothers knew how to threw a Hadouken because of sheer cultural popularity.

SONY barely has any first titles of their own that would sell their console. The only one that pops to my head straight up is Little Big Planet, but I don’t see anyone purchasing a SONY console to play those. Whatever that Super Smash Bros. clone they had on PS3 failed and burned splendidly.

PC gaming is different, however. With PCs becoming mandatory in modern life to a large extent, gaming is more or less a side business for it. The PC itself is not bought for gaming, but its parts are. The thing you should turn your view with PC to is the OS and the programs you purchase for it. Microsoft themselves offers a large variety of programs from Office to  all sorts of different apps. To sell a product they are selling another product, and other companies then create products to support that product with their own products.

I am a fan of modularity, and as such you could say that I am a consumer and supporter of razor-razorblade model. That of course is not all that accurate, but let’s just go with that.

A thing with this model is that more often than not there is a built in obsolescence, that is a product is planned to failed at certain point in order to encourage the consumer to purchase a replacement. Light bulbs are most often used as an example of this, thou disposable cameras are the best example there is, despite them becoming more obsolete themselves due to everyone owning a smart phone with a digital camera in it. Another would be a plan back in the day when VHS tapes were new was that the companies wanted the VCRs to have a magnetic element in the heads that would erase the movie from the tape with each view, and after four views or so the consumer would be forced to return to the store and purchase a new copy.

However, built in obsolescence is something that companies need to balance out. Having a relatively cheap product to last a year or a half, like a light bulb, is something most people won’t think too much about. However, if a product worth of hundreds of dollars would break down at the same pace, we’d notice it very fast and change for a competing brand that promises longer lasting life.

That said, products that are designed to see physical consumption, like tires, are more often designed to last as much as they can. Price and quality of course come into play, and the cheapest tires you can find most likely will die out faster than those with higher quality. While the rich can purchase the cheapest things out there just fine and keep replacing them, the poor don’t afford to buy cheap due to built in obsolescence.

Modularity of course can invite unwanted competition. It’s not all too uncommon to find a third party producer to be making unofficial pieces to the main product with or without a licence. This is more common with older products that are not maintained, supported or have been abandoned. I guess the NES is technologically obsolete at this moment, but it still sees spare parts and modification pieces produced for it all the time.

Consumer should be aware of the razor-razorblade business model when making a purchase. There are always options, and if you regard the complementary products as valid, then there’s not much to debate. However, there are always alternatives, and being aware what can be used in what combination can sometimes be surprising.

Even with food you are most likely sold another product to go with the main one. Chips need to be dipped, after all.

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