Quote:
Originally Posted by Wilbury Twist
I remember seeing nothing lower than 25NL when I first started playing online (PokerRoom). While I enjoyed having smaller options, I was surprised to see 2 NL and 5 NL on Stars and Tilt, mostly because it would seem to eat into the overall rake that those sites could make. But maybe they found it to be the opposite: the microstakes created a new price point for thousands of players who wouldn't otherwise play.
Whenever there's short-term profit to be made by setting a price that's lower than the industry standard, companies are bound to step in and offer it, because consumers obviously like cheap prices. The problem for any industry where this occurs is that the long-term margins will be cut for
everyone, so you have to sell in bulk (hi multitablers!). e.g. Once record companies started enabling 99 cent mp3 downloads, no one wanted to pay $15 for whole albums. Amazon sells e-books for $2.49 with a 'buy one, get one free' coupon, but 2+2 can't sell printed books for $30.
A "problem" the sites perhaps didn't foresee is that by offering lower buy-ins and encouraging multi-tabling, regs would get trapped in the micros. With very little upward mobility, the 'food chain' will eventually break down, but sites like Stars can still make money through the sheer volume of micro-payments.
The sites can't put the genie back in the bottle. They can't arbitrarily raise the minimum buy-in to $10 or $50, in order to get more money moving around, in the same way a record company can't arbitrarily raise the price of mp3s to $5, because the customers will go elsewhere.
Online poker has become a low price entertainment medium. It's on the internet. It
has to be cheap. It's not going to become more like live poker. For better or for worse, it's a completely different beast.