I think you're confusing "a commitment to the hobby" with "a commitment to [X] scale."  They are not one and the same.  The former will be noticed by all; the latter will only be noticed by that one scale.

Now despite homes getting smaller, N scale has held roughly 20-30% of the market for years now - it's been a stagnant ratio since the 90s - and it has not moved much since.  If anything, the growth of other scales, which would make no sense in your paradigm since they're all bigger than HO, such as G and O [particularly after the On30 introduction], and in my local area I know more Sn3 layouts than I do N.  So while people may be leaving HO, they aren;t necessarily going to N. 

And why is N standing still, seemingly?  While you do have some people going into N, you have just as many leaving N for either the larger scales [I know three club members who are X N-gaugers, one is now a G scaler due to his eye sight - he likes reading car numbers] or the smaller scale, Z.

You mention this shrinking paycheck, and yet N is consistently more expensive per unit and per square foot than HO and perhaps even O if you were to attempt the same level of detail. The resale market further provides a wealth of available products at very affordable prices, so if the market caps, we have options.

Now here's what I would do, based upon my limited observation of the market: I would not give a rat's ear to the "future" curve - It's purely speculation - and I would build for TODAY'S market.  You say the future of N scale is a marketplace where I'll make three times as many N scale sales as I will in HO?  Fine, then when the money talks, I'll walk over to this scale and produce products.  Until then, my lineup would be pretty solidly in the scale that sells on a 3:1 margin over the next scale in line.  Even if my scale drops in popularity, if my income is sustainable for my plant, than no change at all would be necessary - perhaps for years or even Decades!

For you see, if I make $1 on the N scale run, and I make $3 on the HO run, and time being a limited quantity and thus allowing me only 1000 runs, then I have $1000 if I produce the former and $3000 if I produce the latter.  And this means by simply focusing on the popular scale, I have three times as much money available for future products, whatever those products may be.

The only pressure I'd have to produce in N scale would be market saturation and research costs.  If the HO market is saturated with all the easy products, and I can't make any more easy money, then I'll take my well researched plans [all drawn 1:1 on my computer CAD program], rescale them to the next popular scale, and produce a second set of tooling.  But this next most popular product in my canon might not even be made in N - it might be making a product I make in HO in a larger scale instead.  In short, it's a matter of low lying fruit...

I don't see the human hand changing size in the next 20 years.  Nor do I see it getting easier to stuff components inside locomotives - I almost sense 'DCC activated waving engineers' will be next.  And if you must bring that up... I should mention it's one of the progressive ideas that it is important to serve fringe communities. 

Good hard solid economics are not counter intuitive - It's not about Future production, it's always about meeting the needs of the market TODAY.  The total extent to which manufacturers can manipulate the market is really quite small.  And as Target says [as I learned through their corporate librarian years ago], they don't want to be the biggest and have the most customers - they just want to be the best with the customers they have.

 Frankly your economics "Uber Alles" methodology does not make sense in the long ru since homes are getting smaller not to mention the average weekly pay check. So keep thinking that HO is the only way to go and you'll find N is growing faster than HO and is now in the position where O was in 1960s when HO took over the market.

I hate to rain on your parade, Irv, but homes are not getting smaller, they're getting larger. The average American house is twice the size it was in 1950.

http://tinyurl.com/3h9baw7

http://www.outsidethebeltway.com/size_of_average_american_house_doubled_since_1950s/

The average weekly paycheck argument won't hold water either for two reasons. There's at least an order of magnitude difference between what is available now and what was available 50 years ago. The problem is not the price of any individual item, but the fact that you're in a candy store with a nickel and there's thousands of dollars worth of candy in the store.

The second reason that the argument won't hold water is the N scale is not significantly cheaper than N. Furthermore, you can get nearly 4 times as much N scale stuff in a given space as HO (about the same ratio as HO to O). Even if you save on a unit basis, you're going to need more than you might otherwise. There's no real economic reason for choosing N scale over HO, rather, it has to be the space restraints with which one is personally faced.

BTW, HO overtook O in the 1940's, not the 1960's.

Mike

Irv sez:

"So unless you and the Democrats are on more than a first name basis, don't expect any government bail out when HO ends up being less than 10% of the market in 20 years."

First, your political leanings are well known, and they still have no place when discussing trains.  Second, as is being noted in your other thread, I think you're inadvertently conflating your own personal situation with the state of the hobby.  Be careful...

Is that Irv chose this thread to warn against those who only look at profitably in the short term. Since Walthers has been a continuously operating firm for nearly 80 years and Irv's complaints are leveled against Walthers, I don't think a reasonable case could ever be made that Walthers is only into short term profits. As Dr Phil is so fond of saying, "the best predictor of future behavior is past behavior"/

Rob sez:

 Second, as is being noted in your other thread, I think you're inadvertently conflating your own personal situation with the state of the hobby. 

It's just my opinion, Rob, but I think I would have left out the word "inadvertantly".

Mike

First, your political leanings are well known, and they still have no place when discussing trains.  Second, as is being noted in your other thread, I think you're inadvertently conflating your own personal situation with the state of the hobby.  Be careful...

Agreed on both points.

Besides, as long as you've been posting, you have commented at how everything

(including and not limited to: your wife, religion, health status, family status, marriages, small apartment size, weather, work, small neighborhood house pets, the NYC government, income, retirement, too much time, lack of motivation, bad newspaper editorials, good newspaper editorials, the sun, old cats with no teeth, an old Weber grill, broken brooms, flowers that don't live in a vase for more than a week, chain link fences, spell check software, days of the week, and girl scout cookies)

conspires to keep you from enjoying the hobby as you would like.

Nor, have you been able to post up any work recently on your railroad due to

(including and not limited to: your wife, religion, health status, family status, marriages, small apartment size, weather, work, small neighborhood house pets, the NYC government, income, retirement, too much time, lack of motivation, bad newspaper editorials, good newspaper editorials, the sun, old cats with no teeth, an old Weber grill, broken brooms, flowers that don't live in a vase for more than a week, chain link fences, spell check software, days of the week, and girl scout cookies)

which would indicate that you're not that actively involved.

So I find it ironic that you would consider Walthers making poor business decisions as you have alleged, when based on your posts, you're clearly not a customer to begin with.

I see smoke curling up from the tinder to become a flamefest, and that's not what I want here.

So I'm closing comments.