Originally posted by General Kaliero
As for Lik-Sang, Sony had no right to sue them out of business.
Lik-Sang sold everything, Nintendo, Sony, and various computer systems, from Japan, and now people who didn't even care about Sony lose their supplier of, for example, high-quality laptops. How is that fair, or justified? It isn't, plain and simple. If Sony actually believed that there was some violation of law or possible safety hazard, the correct course of action would have been to contact Lik-Sang and have them pull the PSPs from their product list and attempt to refund the "hazardous/illegal" PSPs. Instead, Sony has commited what is, quite conceivably, a crime, by destroying a company and putting many, many people out of a job.
Actually, they do.
*Sigh* Swear to god, If I ever become President I will make it mandatory in all schools for a person to take economics courses before graduating. Hell, I'll make sure you can even get a driver's license without passing them...
Back to the subject.
I don't even think people realize what import taxes really are for or the fact that Lik-Sang somehow completely bypasses this aspect of importing.
Now with that in mind, consider the PS3 for a moment. Sony dropped the price of the PS3 $100 in Japan to better fit that market and it also means they will be making $100 less on each console sold in Japan. Now there are laws in place for global trading which helps protect companies which allows them to do this. One major method of this is import taxing where most of that money eventually ends up in the hands of the originating company. This means that even though Sony sold a $400 Playstation to someone in Europe, import taxes should make up the difference in domestic and foreign prices.
Lik-Sang bypasses this entire process. This means Sony has the potential to lose a TON of money because not only will they be selling a bunch of Playstations for $400 to the Japanese market, but they will also be selling them at $400 to a potentially huge import market.
This is the basis of what is known as arbitrage and the abuse of arbitrage is something that many countries are now making illegal.
Sony has every right to do what they did. I'm sure the other companies in the market are secretly thanking Sony for stepping up to do this.
Sony was also protecting themselves from consumer fraud allegations. By importing PSPs or PS3s into a country that has different electrical or region-coding standards than the system is meant for, they hold themselves at risk for lawsuits or very well much felony charges from the governments themselves. They would have been held liable for any and all damages.
And for information, Sony has MULTIPLE times asked Lik-Sang to follow their standards and the laws of Europe regarding importation. However they refused. Multiple times.
People, PLEASE understand the concept of importation of goods, the concept of arbitage and more importantlyt the concept of a producer's goods in relation to import taxes.
I REALLY don't think half the people even understand the content of the article.
Which is alright because the global economy, especially regarding foreign trade and finance is a VERY tricky business and not many people can understand it.
But we can understand this: A firm acts in its best interests. You don't have to understand arbitrage or import taxes or importation standards. You just have to know that a firm protects its profit interests. OBVIOUSLY Lik-Sang was acting against the economic interests of Sony.
To make it easy to understand:
I sell bananas.
I sell bananas in two countries.
I sell bananas in my own country for $10.
I sell bananas in France for $10 too. But the country adds a $5 import tax for every banana I sell. So I sell the banana for $16 in order to make a $1 profit, cover my profits and cover the cost of import tax.
Let's say a retailer named Lik-Sang sells my bananas in France...but they're selling bananas meant for the USA. They sell the imported bananas at $10 in France.
How much do I lose? How much do I earn?
This is PRECISELY what Lik-Sang has been doing for YEARS. They're selling imported products meant for a specific market in a specific country in order to take advantage of arbitrage and make a profit. More so than retailers selling the products legitimately. This is against the law. It's illegal and it not only hurts Sony's profits but it hurts the gaming industry as a whole.
When one sells a product they will ALWAYS be a tax of some kind. In a capitalist society, consumers "incur" the tax. It's an embedded price. Producers simply add the tax to the final price (I am NOT talking about sales tax; that's a completely different subject) and account the tax as debited to the asking government.
Lik-Sang bypasses that step. They reverse the economic model. They incur the tax on the producers. Like Sony.
If Lik-Sang sold my bananas for $10 in France, I would have to pay for the tax out my own pocket. My profits would go down. And logically, I would not be able to produce at my previous profit margin. Thus my production goes down. The supply of my bananas goes down. And the quantity supplied and sold for bananas goes down.
What happens then? Why the f*ck should a consumer care? Less goods = what? HIGHER prices. That's what it's ALL about.
Sony is protecting not only THEIR asses but YOUR asses as well. THINK. Use my simple example. The price of the PSP and PS3 is high enough already....what would happen if the price of these goods were to rise in Japan due to lower supply of PSPs/PS3s? They go UP.
They just lowered the friggin' price...and now not ONLY will the price go back up due to the laws of economics but they will ALSO incur costs of import taxes.
How would this affect the gaming industry. Prices will go UP in long-term. More so than they should.
Does everyone understand? Lik-Sang is not the victim. They're not ANYWHERE near the victim. Sony did us all a big whopping favor....