Maybe Sony will help you build a supercomputer too!

I have known about using Sony PlayStation 3 platform as a supercomputer, but I still found this item over at Ars Technica interesting because it lays out the case better.

It leads me to wonder how long the business model for console gaming can last. Basically, game purchasers subsidizing unintended uses of the PS3 platform. This will produce one or more of the following consequences in the long run:

• Fewer gamers adopt the PS3 platform because the game prices are higher than on competing platforms;
  
• The profits of Sony and of game developers are lower;
  
• Sony does what Apple does and tries to "capture" the PS3 users, creating a future for people who can "jailbreak" PS3s
  
• Console manufacturers create "crippled" consoles that can't be effectively used in this way. For example, is anyone using clusters of Xbox 360s as a supercomputing platform?
  

iPhone Apps and economic networks

I have blogged around this subject before, so when this article in BusinessWeek showed up, my interest was piqued. When economists began looking at standards in IT in the 1980s, researchers like Joe Farrell, Garth Saloner, Carl Shapiro and Michael Katz began noting the importance of networks of tie-ins to the lock-in often associated with standards. They noted in particular the importance of software to the success of PCs vs. Macs (though this view was disputed by Margolis and others).

The BusinessWeek article is significant because it shows a weakening of the tie-ins to the iPhone, which would, according to the economic theories of standards, suggest that the durability of this platform in the face of other existing (and emerging platforms) is not particularly strong. Note that this is not unrelated to the "opaqueness" of the approval process by the Apple App Store and the relatively poor profitability of iPhone apps.

Termination charges in mobile systems

This post discusses a paper by economist Sandy Levin comparing Wireless Party Pays and Calling Party Pays. The paper rightly concludes that CPP systems require ongoing regulation because there is no competition for termination charges, so they can get quite high. The subject of high termination charges has been the subject of EU regulation as well as complaints by the US Trade Representative.

Metered Broadband?

There have been a couple of articles about metering broadband (see this article at TLF and this response at Techdirt), which resulted in this debate. My $0.02?

• It is clear to me that metering makes sense from a microeconomic standpoint, but only during episodes of congestion. If there is no congestion, the marginal cost of a packet is exceedingly small, so it may well cost more to collect and bill for traffic than the revenue it produces.
  
• As a consumer of broadband services, I prefer to pay flat rate prices. My wireless provider gives me the option of different service levels, and I have chosen to pay more for the "unlimited" tier because I would rather not accept the risk of usage charges should I exceed my monthly allotment (I realize that "unlimited" may not actually mean "unlimited" ...)
  
• As commenters on the previous posts have pointed out, telcos are profit maximizers, so metering is a way for them to price discriminate more finely than they now do with service tiers.
  

Since carriers have considerable freedom in setting prices, they have obviously determined that usage tiers make more sense for them than pure metered prices. Don't you think that they have calculated the costs and benefits of different pricing structures? Why are we having this debate in the first place, since consumers and carriers have clearly settled on a set of pricing and consumption structures independently?

Micropayments and Adblock

There have been a number of posts recently like this one was relevant to the subject of micropayments, which I discussed earlier. In that item, one argument was that web site advertisements amount to a form of micropayment for content that was not expected by industry analysts. The use of the Adblock extension has resulted in a loss of revenue for websites that have relied on advertisement (see this, for example).

It seems as though this user-controlled technology may force major changes in how micropayments have been accomplished. How radical do you think the Adblock-related changes in Internet-content delivery will be? Do you forsee a kind of technology "arms race" in which content providers try to subvert the Adblock technology?

Micropayments

This article is interesting. There have been numerous schemes over the years that have been designed to facilitate micropayments, but none of them have taken off.
Quoting the article:

Amid the disdain, and without many people noticing, micropayments have arrived — just not in the way they were originally envisioned. The 99 cents you pay for a song on iTunes is a micropayment. So are the tiny amounts that some operators of small Web sites earn whenever someone clicks on the ads on their pages. Some stock-photography companies sell pictures for as little as $1 each.

“Micropayments are here,” said Benjamin M. Compaine, a consultant and lecturer at Northeastern University who specializes in media economics, “they just have not evolved in the way that everybody expected.”

Why do you think they have "not evolved in a way that everyone expected"? Do you think micropayments will continue on their present trajectory, or do you see big changes coming?