Display MoreIn economics this is called "price discrimination."
Basically imagine you have 100 potential customers for this product.
One group of 50 (we'll call them Group A) will only pay $700 for it; and if it is only $700, they are ok with a more limited set of features.
Another group of 25 people (Group B) will buy it for $700 with more limited features, but *would* pay $1000 for it with expanded features.
Another group of 25 people (Group C) will only buy it with expanded features, and they would pay $1000 for that.
If you sell it with limited features for $700, Group A will buy and group B will buy, and you will make $52,500 (75*700)
If you sell it with expanded features for $700, all 100 will buy, and you will make $70,000 (100*700)
If you sell it with expanded features for $1000, only Group B and C will buy, and you will make $50,000 (50*1000)
But what if there was a way to sell it with limited features for $700 and expanded features for $1000?
Now all 100 will buy and you make $85,000 (Group A: 50*700, Group B & C: 50*1000).
DLC allowed for price discrimination which maximizes your revenue in many cases. Companies love price discrimination but in many cases it is either impossible or illegal (i.e. a company could maximize their revenue if they charged a rich person $50 for a box of cereal but a poor person $5, but you can't do that both logistically or legally). But in situations where they can do it, they often will do it.
Yes, this is pretty much the story.
But there is another circumstance that brought us into this direction.
When you downsize a product, often downsizing the core does not save much cost, e.g. by finding a smaller processor.
If available at all, it would save a few bugs, but the additional efforts to run and maintain an established software and operating system on a smaller processor easily eat up the marginal cost savings, without creating any advantages for us or the user. No one wins.
You can see similar situations in the car industy, where three models with different power ratings use the same engine block and sometimes same displacement.
Electric cars will usually take the same electric motor for different power offerings, because total costs will increase by developing, certifying and manufacturing three different engine sizes, and gaining the opportunity for later over-the-air updates, so users can make a qualified decision about upgrading or not, while they are in the possession of the car already.
When we released the Profiler Head in the beginning, we had planned to have the power amp be a module that can be purchased later and seamlessly be inserted into the back of the Head, as we had anticipated that it is hard to decide on day one if you will ever make use extensive of the power amp.
Laws and certification rules prevented us from doing so, unfortunately.
It is more satisfying and a sustainable business to simply have a happy customer, rather than having to recommend: "Better take the powered version now, you never know what your needs are in the future".
The possibility for said upgrades came in a natural way to us, as described above,
And while it wasn't planned at first place, it might create a win-win situation.
We have the opportunity to offer the same enclosure with different power and different price, and our users have the freedom to decide for more power anytime after the purchase, when they have got familiar with the product.