The following appeared as part of an article in the business section of a daily newspaper:
“Company A has a large share of the international market in video-game hardware and software. Company B, the pioneer in these products, was once a $12 billion-a-year giant but collapsed when children became bored with its line of products. Thus Company A can also be expected to fail, especially given the fact that its games are now in so many American homes that the demand for them is nearly exhausted.”
Discuss how well reasoned you find this argument. In your discussion be sure to analyze the line of reasoning and the use of evidence in the argument. For example, you may need to consider what questionable assumptions underlie the thinking and what alternative explanations or counterexamples might weaken the conclusion. You can also discuss what sort of evidence would strengthen or refute the argument, what changes in the argument would make it more logically sound, and what, if anything, would help you better evaluate its conclusion.
Company A is too big to fail
The first flaw with this argument centers on the assumption that Company A’s games have only recently become popular and that demand for them will wane as parents begin to tire of them. However, as with most forms of media, children’s tastes change as they grow older. Therefore, it is more likely that Company A’s games are becoming less popular, not more popular, with children. Furthermore, the flaw in this reasoning is the fact that the games that are popular now may have been unpopular in the past; thus, having children play them today will not cause them to lose interest in them tomorrow
Furthermore, the argument implies that children’s games have replaced adult video games. That statement is patently untrue. Children play different kinds of games than adults. Children love active games, games that require them to move around physically. Adults, on the other hand, prefer games that can be played while sitting in front of a screen. In other words, children play games that require them to expend energy, while adults play games that require them to sit in one place, such as on a computer or television screen. Of course, children play games that require them to sit in one place, too, but those games are usually different from those preferred by adults. Therefore, children’s games can become popular again when children grow up, just as adult games can
An additional flaw in the argument is the fact that a $12 billion-a-year company is no longer too big to fail. A $12 billion company can only fail if its owners allow it to fail. If Company A’s owners decide that they have other more profitable ventures to invest in, such as real estate, then they may abandon the video games and fold the company. However, if Company A’s owners go bankrupt and its assets are sold at auction, then the company will be liquidated, and its assets will be divided between the creditors of the company. That is why a company’s size does not determine whether or not it is too big to fail
If this argument were sound, then every company in the world would collapse because it all had a large share of the international market. For example, if every automaker in the world operated at a profit, then every automaker would go out of business, because demand for automobiles would wane as children grew older. Yet, as the above example illustrates, a company’s size is not the only thing that determines its success or failure. Companies succeed or fail based on many factors, including business practices, management, and the quality of its products and services. For example, a company that started in the video game industry struggling and never built a reputation may someday experience a resurgence, while a company that is well-respected in the industry, whether it sells video games or not, may suffer the same fate as its predecessor. Therefore, this argument is not well reasoned.