Another day, another high-priced Teenage Engineering product. The lauded Swedish company is no stranger to grumbles over exorbitant price tags, with its breakthrough OP-1 rising from its initial £799 to a hefty £1199, and its replacement, 2022’s OP-1 field, clocking in at around £1600 on release.
But its latest release, the OP-XY, is the priciest yet, commanding an eye-watering £1899/$2299. The reaction has been swift and vitriolic, with disgruntled would-be customers taking to social media to vent their spleens.
“The price is outrageous. I really hope the sales are weak for this device and the price has to be dropped.” (mschurenko)
“It's pretentiousness tax.” (n3ur0chrome)
“Just buy the OP-XY sweatshirt instead of the synth. It’s a steal for just $120.” (_fck_nzs)
“I'm struggling to see the value of this thing. Is it actually overpriced or is there something I'm missing?” (Apetard60)
Once again, Teenage Engineering has provoked the wrath of the synth community with a drool-worthy product attached to a price tag that places it out of reach of the average musician or bedroom producer. But why exactly are people so enraged, why is the OP-XY so expensive, and is it actually worth the cash?
What is the OP-XY?
If you’re unfamiliar, the OP-XY is an all-in-one music production instrument that, despite its OP-1-like appearance, actually has more in common with the sequencer-focused OP-Z. A groovebox in synth’s clothing, it encompasses eight different synth engines, a sampler, and sequencer in what can only be described as a triumph of design: a dark mode version of the OP-1, it's Casio gone goth. “It's minimal. It's efficient. It's sexy,” says the product website. It's not wrong.
That gorgeous package also includes a 24-key keyboard made of Chiclet-like keys, built-in speaker and OLED display, something that the OP-Z was controversially missing. As with the OP-Z, there’s also a gyroscope inside that offers motion-based control over various parameters.
The sequencer is the real star of the show, however, boasting 64 steps for 24 voices of polyphony plus the Brain, a slick piece of code that automagically transposes sequences based on notes entered by the user. It’s this function that has people most intrigued, something brand new to the TE ecosystem - and something that really hasn’t been seen anywhere else outside of DAWs.
Exciting stuff, without a doubt, but is this enough to justify the price?
What could you get instead?
We know how much the OP-XY costs (£1899) and what it can do (sequencing with built-in synth engines and drums). But what could you get instead of one?
If you’re looking for an alternative groovebox, the most likely candidate would be something from Elektron, another Swedish company with a fervent following and unique workflow. The most recent Digitakt MKII, which offers sequencing and sampling, goes for around £850. Pair that with a Digitone II for FM sound synthesis for another £850, and you’ll still have a few hundred quid leftover for studio snacks.
Another option is the Polyend Play+, which combines sequencing with internal synth engines and sampling. At around £650, you’ll have plenty cash left over.
Many have compared the OP-XY to the Deluge from Synthstrom Audible. Similarly sequencing-focused, it also has internal synthesizer engines. At around £1200, it’s quite a bit cheaper than Teenage Engineering’s instrument.
Lastly, if you’d rather upgrade your computer, you could get a base model Apple MacBook Pro for £1,599 with enough spare dough for Logic Pro (£199.99).
Clearly, there are a lot of affordable alternatives to the OP-XY. Looking at it this way, it does seem rather expensive. Where is all that cost coming from?
How much does it cost to manufacture?
There's no way of knowing exactly how Teenage Engineering came up with the price that it has chosen for the OP-XY. We reached out to the company to discuss its pricing strategy but it chose not to comment. This is unsurprising, as manufacturers typically don’t discuss internal business matters publicly.
With all musical instruments, however, the most significant factor behind the price is the cost of manufacturing. As Nick Batt mused on a recent Sonicstate podcast, perhaps the OP-XY is "expensive because it’s expensive".
The housing, all of the buttons and keys - none of which are standard on the OP-XY, by the way - plus internal parts like PCBs, these all have to be paid for. There are also the components that get soldered to the PCBs. And speaking of which, that soldering and manufacturing costs money as well, which leads us to economies of scale.
Economies of scale refers to manufacturing costs based on how many of something a company makes. The more you make, the less you pay. It’s like buying food in bulk, but instead of crisps and chocolates, we’re talking about capacitors and resistors.
If you’re someone like Apple, making devices in the millions, your outlay is going to be less per unit than if you’re doing small batch runs of boutique instruments. Teenage Engineering, it’s safe to say, is somewhere between these two polar opposites, more than the average Eurorack module but less than a mass-market Roland stage keyboard, for example.
There are also negatives associated with things peripheral to the product itself, such as bundled accessories, paper manuals, and packaging. Then there’s shipping and other associated miscellaneous costs, such as advertising, promotional videos, paying third parties for preset creation, and so on.
What's more, the cost of creating a device like OP-XY isn’t only driven by physical parts and manufacturing, despite the common misconception. There’s also manpower.
Synthesizers are complex creations that can take years to reach completion. It’s no exaggeration to say that given all of the R&D and, particularly for a complicated digital device like the OP-XY with its new Brain feature, coding, there are thousands of hours of manpower invested in it. All those employees working all that time need salaries, and the money for those salaries comes from the sale of already-finished products.
And that isn’t even taking into account the employees who aren’t directly related to the product but keep the whole enterprise in motion, like HR, accounting and other support staff. And then there are overheads such as rent, insurance and transportation.
You might be getting a good idea of the costs that go into bringing an instrument like the OP-XY to market and how it might translate into profit for the company. Now take that number you’ve guesstimated and cut it in half. Yes, half. Because a third to half of the price of a product never makes it into the company’s bank account.
At risk of stating the obvious, products don’t ship directly from manufacturers to customers, for the most part. This is handled by a distributor, who then sells them to stores with a markup - which themselves add their own markup - usually around 30%. All this marking up keeps the distributor/store sales system in motion.
Because of this system, the amount that the manufacturer receives from the sale of an instrument is about two-thirds to half of the eventual sales price. If you’re following along, that puts Teenage Engineering’s takeaway at £950 to £1300 for each OP-XY sold. From which the company has to pay for manufacturing, components, manpower, overhead, and any other business expenses it may have.
Another aspect of pricing that we haven’t yet discussed is inflation. The global inflation rate (as of 2023) is 6.9%, the highest it’s been in almost 30 years. This means that not only you as a consumer pay more for products, but manufacturers pay more to make those products.
Companies often get complaints for having to raise prices, Teenage Engineering included, but its historic price increases have generally stayed in line with inflation. For example, the OP-1 cost £799 upon release in 2011, but went up to £1199 in 2019, a seemingly large increase but one that is not egregious when you consider inflation. The OP-1 field has a price of £1600, one set in 2022. Four years later, that’s more like £1800, which is not coincidentally pretty close to what the OP-XY goes for now.
Price expectations and perceived value
“This thing is gorgeous and I don't think it’s overpriced at all. I think you are getting a beautiful instrument that’s very well crafted and very well put together for your money. I don't think there's anything wrong with that.”
That’s Richard Nicol, the head of Pittsburgh Modular Synthesizers, speaking on the Sonicstate podcast about the OP-XY. Given that so many have complained about the opposite, and Richard makes synthesizers for a living, we asked him to expound on why he thinks he price is justified.
"The price is justified or not by the value an artist gets out of the instrument"
“The price is justified or not by the value an artist gets out of the instrument,” he said. “With digital hardware you are purchasing reliability and workflow. The attention to detail put into the OP-XY by Teenage Engineering will make this instrument a perfect fit for many artists who will certainly find value in their purchase.”
Richard has hit the nail on the head. Whether you find value in a product or not is directly related to your perceived value of the item. ‘Perceived value’ refers to the price that a consumer is willing to pay for a good or service. If that product fulfills some need for them, one that another product cannot, it has positive perceived value. This is what Richard is referring to. For many musicians, the OP-XY will have satisfactory perceived value and the price will not be unjustifiably high.
We asked Richard if Pittsburgh Modular has experienced a similar pushback on prices. “Of course, the internet if full of opinions based on price versus perceived value,” he answered. “Our customers are artists and every artist has unique hardware needs to compliment their workflow. If one of our instruments does not meet all of their requirements or if they are only interested in a subset of an instruments features, the perceived value of the instrument goes down in their mind.”
“I think more often, it’s people who are not customers who undervalue products”
Kris Kaiser at Noise Engineering told me a similar thing when I spoke to her about the perceived high cost of Eurorack modules for a different publication. “Most people who have bought our products understand the cost,” she said. “I think more often, it’s people who are not customers who undervalue products.”
Another factor that likely affects the perceived value of the OP-XY is its size - or lack thereof. People are used to paying premium prices for big synthesizers like the Moog Muse or Arturia PolyBrute 12, but the OP-XY, which borrows design cues from cute, toy-like Casios, may be too small for its own good. “I suppose the thing [is] because it's small,” conjectured Nick Batt about the reaction to the OP-XY pricing on his podcast.
In a similar way, the diminutive Woovebox has also raised hackles due to its size-to-price ratio. “I’ve seen people on Reddit complain about the Woovebox price,” observed poster lexwasashrimp on the Elektronauts forum. “Apparently it being compact means the price should be 100 bucks or something.”
The OP-XY's perceived value is not only influenced by the utility it provides as a music-making device, but also its status as a lifestyle product. Despite the criticism it receives over pricing, Teenage Engineering is a brand with a devoted following that commands the attention of the music tech and design worlds with each release - its instruments have been used by everyone from Thom Yorke and Trent Reznor to Depeche Mode and Childish Gambino.
Teenage Engineering isn't only a maker of synths and sequencers; it's a design company first and foremost, with an ethos that's driven by aesthetics as much as functionality. This has earned it a reputation as a fashionable, luxury brand with a somewhat rarefied status compared to, say, Yamaha or Korg. When people buy a Teenage Engineering product, they're not just buying a synth - they're buying into the company's reputation and its cultural cachet. This is at least partly why Teenage Engineering can price its products so highly, and why people continue to buy them.
“People are upset because Teenage Engineering has created an interesting flagship instrument that is out of the reach of a lot of people”
But this still doesn’t explain the sheer emotional reaction to the price of the OP-XY. Scanning the responses across social media, it almost seems as if people feel personally attacked. “I think people are upset because Teenage Engineering has created an interesting flagship instrument that is out of the reach of a lot of people,” summed up Richard Nicol. People feel they deserve it, but they can’t afford it.
Synthesizers and other electronic instruments used to be so expensive that only the wealthy (and huge rockstars) could afford them. Nowadays, thanks to advancements in manufacturing and an expanding user base, we've seen a consumerization of synthesizers and drum machines, to the point that you can now buy fully-featured instruments for less than £100.
This overall drop in prices has been accompanied by a new consumer mindset of entitlement. Because of a prevalence of businesses that offer goods and services for cheap or even free, many people have come to feel that they deserve low prices, that it’s their right as a consumer.
“I’m so sick of the entitlement some people feel about having a right to cheap consumer goods,” said opopop on the OP Forums. “Grow up or work harder! If you’re cheap, buy cheap.”
Ultimately, if the price of the OP-XY seems too high, then that's because you're not Teenage Engineering's target customer. This is true for any Teenage Engineering product, even the £1250 Field Desk, which Nick Batt referred to as a “con”, but is actually sold out on the TE site.
“You’re paying for a production lifestyle,” said Willing_Low_9232 on Reddit in response to complaints about the price of the OP-XY. “I use TE gear because it reminds me why I love making music and it’s fun.”
There’s no way to know exactly how much Teenage Engineering is making on the OP-XY. But even if it’s pulling in a 50% profit margin, would that be a bad thing? Teenage Engineering is not a non-profit; it’s a business that exists to make money. And as long as its users are happy with its products, who are we to say that TE is off the mark? Now, if you’ll excuse me, I need to speak to the bank about a loan.
