> I suspect what happened was rising prices because of the pandemic and the war showed companies they can increase prices without also suffering a significant decrease in sales. After all, when virtually all prices are going up, where are consumers going to go?
On the Odd Lots podcast, it's been discussed in various markets that companies that survived 2008 learned to avoid large capital investments when their competitors all went out of business chasing market share. And if market incumbents are all too afraid of making large, long term investments right now, output can only go up after new entrants to the market appear.
The online discourse seems to favor cigars and shady board rooms, but it seems just as likely to be risk aversion.
If only there was a discussion forum that could match up founders with venture capitalists ready to take on big challenges!
You have picked perhaps the worst example industry, on perhaps the worst venue to write it.
There's also a question of why high margins don't induce new entrants to these markets, or why consumers responding too cleanly to higher prices by buying less. There's been a variety of factors at play and I think if you want to pin it on profits you gotta put in the legwork to rule out or at least quantify the dozens of other factors.
And like, if Nintendo wants to charge an extra ten dollars for Zelda[1], I don't think thats any kind of call for EU/UK regulators to step in.
[1]: https://www.gamesradar.com/zelda-tears-of-the-kingdom-is-get...