Quote:
Originally Posted by YoureToast
The incentives to merge, I believe, are the same whether they are big business or not. The problem with merging and raising prices is that the barriers to entry are relatively low. Additionally, the developers are from opposite sides of the planet so that makes cooperation more difficult. The other side of the coin is that the prospect of merging (or being acquired) creates a partial incentive to create the business in the first place. Its for all of those reasons, among others, that make the US system of capitalism so great IMHO (not sure if you were slamming the US or not and I respect your opinion a lot JP). In fact, I believe the US's antitrust laws are close to optimal for situations like this (ie assuming the deal would be big enough, which it wouldn't, the FTC would persumably have very little problem with a PT3/PEV merger due to the low barriers to entry and the existing competition (HEM/PokerOffice, etc.)
With all that said, my prediction is that there WILL be consolidation in this industry.
I wasn't really slamming the US, but just making a comment. However, I do not place much faith in the US anti-trust laws. The FTC enforces them haphazardly at best. Note the oil companies that were allowed to merge and the Microsoft litigation under Clinton. Under Republican administrations, the anti-trust laws are often ignored.
You are right abou the ease of entry making a merger pointless. In fact, in most industries if mergers raise profits too much then competitors will enter the market. This is what is great about capitalism. Until the government tries to regulate and run it thereby creating huge costs and barriers to entry and other distortions such as huge government contracts. Truthfully, we could repeal all the anti-trust laws and be better off. Better yet we could eliminate one-half of DC, but I'm just dreaming about the world that when I grew up. (I'm 53)
P.S. I'm looking forward to your HUD. I plan to try it as soon as PS is supported.