Demand: Thinking Like a Buyer $-$ End of Chapter Problem

When Sony released the PlayStation $4,$ it was reported that Sony was taking a loss of $$60$ on every PS$4.$ However, Sony expected to make this up with sales of PS$+$ subscriptions and increased royalties from video games. Use the interdependence principle to help explain this strategy.

The PS$+$ subscriptions allow PS$4$ owners to play their games online, receive new games monthly to download at no charge, and receive additional special discounts on other items. Therefore, the PS$4$ and PS$+$ subscriptions are in consumption. Decreasing the price of the PS$4$ will the demand for PS$+$ subscription substitutes revenue from recurring PS $+$ subscriptions will be larg $vv$ increase in revenue from PS$4$ sales.