The Decline of the PS3 Grey Market

Kotaku has a great piece up looking at trends over time in the PS3 grey market. Michael Fahey has been tracking the falling prices for Sony's new console, via sales on eBay and other markers. He called around to stores as well, getting a feel for the number of returns and current availability of the console. His conclusions: "As it turns out my gamer instincts and the threat of hordes of angry readers steered me clear of potential disaster. Aside from a couple brief spikes, there is no way I'd have been able to pull off the television, and I know damn well I would have waited for Christmas like so many others did, only to lose even more. The moral of this story? There's no such creature as a sure thing. The majority of eBay prospectors walked away from this experience with that lesson burned into the back of their brains. My suggestion for the future? If you want to gamble, go to Vegas. If you want to invest, try mutual funds. Leave the video game system buying to the gamers. We'll all be happier for it. "

Comments

Wii on Ebay

[LoverOfJoy]

Now if only the prices would drop for the wii and people started returning them to stores so I could find one.

Re:Wii on Ebay

[UbuntuDupe]

People aren't returning Wiis because a) people like them, and b) you can sell them for more than the refund.

Confession: I'm a failed PS3 scalper. I thought I struck gold when the store I was in announced they had three in stock and I got one (Dec 20). Yesterday I was able to return it (the PlayAlbatross 3 as I call it) for a full refund after price on resell sites plummeted to the point where it wouldn't be worth it. Also, amazon wouldn't take sales from new sellers, and craigslist had scalper hunters unjustly flagging scalpers.

Arbitrage isn't as risk-free as they like to make it sound.

Re:Wii on Ebay

[@madeus]

I said "unjustly" in the sense that the PS3 listings that were being removed clearly met all of craigslist's rules.

I think many here would argue it's still just, irrespective of it meeting craigslist rules or not.

But scalping is a good thing in that it makes it possible for people willing to pay more

Alternatively, it make it nigh on impossible for people willing to pay a reasonable price to get hold of one, and so the products (or tickets) go unused, ultimately satisfying very few people (and so being detrimental overall).

I've seen this both at events and with consoles (typically with loads of people then complaining they couldn't get tickets/consoles through offical channels and having witnessed myself items subsequently being withdrawn from eBay or failing to meet minimum bits, and in the case of tickets, loads of scalpers trying to sell tickets at the door to no avail, and the venue being only 3/4 full despite tickets having 'sold out' in the first hour). The 'empty seats' issue being one of the reasons why tickets for major sports events are often so heavily controlled and tied to a name on photo ID these days (due to unused tickets meaning less people attending the event, and so harming sales of food/drink/t-shirts, etc).

Loads of scalpers end up with excess goods (consoles, tickets, etc) - and potential customers (gamers, music fans, sports fans) end up pissed off and can't buy what they wanted. The summary is right, it's not a good way to make money, if it was I think it's likely event ticket scalpers would not resemble homeless people (as they invariably do). It's seems evident that most people who feel the need to result to gambling on being able to resell consoles as a way to make money are not comfortably off either (if they are, then they are irredeemably greedy).

It only makes money for a very select few, as we've simply seen that there are not tens of thousands of people willing to pay insane prices for consoles rather than wait two months, hell there are barely hundreds of people willing to pay significantly over the RRP, yet scalpers screw up by vastly overestimating demand. "Oh look, that one guy made 10,000 USD selling one on eBay! I should be able to get that too!" (and thinking they are hard done by and blaming others when it doesn't work for them).

e.g. Saying things like "The concert was promoted poorly", or "the team/band/console is no good" rather than thinking they were undone by their own greed.

I saw my I got my X-Box 360 bundle in a store in the middle of London for 380 UKP (IIRC) about a month after they came out. Even though there were no units in store anywhere else, it sat there for a week before I went 'Screw it, I'm thinking of getting an HDTV next month or so, may as well get one now if it's only 80 UKP more, it's not like I'm hard up'. The same story is repeating itself now with the Wii and PS3, in that people arn't willing to pay much over the RRP and would rather just wait.

There is currently a Wii in the same shop also for sale at 360 UKP (bizzarely enough). Normal RRP is 180 UKP, can't get them in any other shops, it has been there for two weeks just being ignored (frankly even I'm surprised, nearly bought it myself). This is a shop that scalps professionally, right in the middle of London (Zone 1, TCR) and people are not paying it much attention even at Christmas. Looks like people are waiting for more stock (which will invariably be around at the end of Jan). They also have a PS3, but it's an import version (no idea what crazy price it's selling at, or if it's even for sale).

If there were no scalpers, people would just hire placeholders.

I doubt that. Only the very wealthy (or incredibly determined and fiscally irresponsible ;-) could afford to have someone do that for a reasonable amount of money - or you'd have to give the job to a person who needed the money so badly most people would be worried about them doing something like scalping i

good article

[mgabrys_sf]

I liked the disclaimers on hard-numbers etc, but it did give an idea of what the retail action is as well as the charting of prices. For those who want to wait until prices fall on the PS3, I suggest checking the price curves on the PS2. Here's a hint: They didn't move for over a year. You've got a long - LONG wait. Sony after taking a loss on intitial units will take the profits on the hardware as long as they can when they emerge.

Still - cheaper than the Atari 2600 / VCS on an inflation adjusted dollar bla bla bla. All I know is it can knock 4000 dollars worth of computers I have sitting in front of me out of the ballpark graphicswise. Once some decent games emerge I'll be heading to the retailer myself to get one. Probably around the time I finish Zelda for the Wii (geez it's huge).

From a retail standpoint...

[borderpatrol]

I work for a major electronics retailer, and we had originally sold our systems in bundles only for approx. $1200 each, with later bundles around the $900 range. We are getting approx. 10 of these bundles being returned a day. We started getting the majority of them after December 20th or so., which would be around the last day to ship from eBay. We are acepting these items back for return, but alot of the folks who bought them on the 17th are stuck with a $1200 store credit.

All the scalpers are mostly saying that "We didn't need it", "We got 2 for christmas", etc. One guy I talked to was honest and told me he bought it to flip on eBay, but the market fell out. Now he's waiting on a Wii to buy for himself.

We have lots of PS3s here at the store gathering dust (we got the largest shipment per store of any electronics retailer), people just aren't interested in them at all anymore.

Re:Same thing happened with XBox 360

[0kComputer]

We went through this with the XBox 360, but with more speculators. People were trying to unload those things on eBay for months, finally at prices below retail.

If I remember correctly the 360's were selling at a premium on e-bay well into the spring. I think that the point of this article is that we've barely passed X-Mas and the prices are already down around retail, which probably implies low demand. In other words, sony is screwed.