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. "

Re:Wii on Ebay

[RasputinAXP]

You say "unjustly" as if scalping is a good thing.

Re:Wii on Ebay

[UbuntuDupe]

You say "unjustly" as if scalping is a good thing.

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

But scalping is a good thing in that it makes it possible for people willing to pay more (rather than spend ages line) able to get one without getting line. If there were no scalpers, people would just hire placeholders. I don't think that would make anyone feel any better.

Re:Wii on Ebay

[Anonymous Coward]

scalping is a good thing in that it makes it possible for people willing to pay more (rather than spend ages line) able to get one without getting line.

The thing is, the fact that the market tanked so quickly means that the vast majority of the people in line WERE the scalpers. Scalpers manufactured the long lines and shortages they tried to profit from, only in this case, the only people to sell to were the other scalpers that were waiting in line to get one because there was no real shortage of units, only the demand created by the scalpers.

Re:good article

[Anonymous Coward]

"All I know is it can knock 4000 dollars worth of computers I have sitting in front of me out of the ballpark graphicswise."

That shouldn't be so, unless you spent those 4000 dollars several years ago. A $4000 PC nowadays has two graphics cards, each of which is a generation ahead of the one in the PS3. It also has 8 times as much system RAM and three times the video RAM (per card). It can display higher quality graphics than the PS3, and at higher resolutions.
If tech specs don't tell you then compare the two yourself. On the same screen a modern high-end PC should easily produce better looking graphics than Resistance or Motorstorm.

Not that I'm seriously suggesting that spending $4000 on a game box is a good idea. It's crazy. Even $600 or $400 is a hell of a lot for a game system. My favourite console at the moment is the DS. I'm writing this post because you're apparently misinformed.

Sounds like a sure thing to me.

[GodInHell]

Well, its actually a good lesson in investing and gambling ... no such thing as a sure thing.

So.. let me get this straight he (1) made an investment of 600$ +/- (2) attempted to capitalize on his investment, but failed and then (3) got a full refund.

Where is the risk in that again?

-GiH

Re:Sounds like a sure thing to me.

[Average_Joe_Sixpack]

Where is the risk in that again?

Well in this case he wound up not being compensated for his time (which of course is a concern in investing). But in general I was referring to the concept of betting on a sure thing.

Re:Wii on Ebay

[Volante3192]

That would be socialism. This is capitalism, and wealth is seperate from rights.

Re:good article

[Manmademan]

It's trivial to build a $1000 gaming computer that is significantly better than a PS3. Get an 8800GTS, a cheap Core Duo processor and mobo, 2GB of RAM, and a cheapo 160GB hard drive and you're in business.

not to turn this into a PC vs. Console debate, but even IF you put all that together, you will have a grand total of zero games designed to take advantage of the strength of your system. (and of course, zero ability to play blu-ray films, but let's not go there right now)

in contrast, every game released on the Ps3 is designed to take full advantage (or as much as possible) of it's CPU and processor. To dumb it down a bit, The Ps2 is pumping out games like God of War, FFXII, and Gran Turismo 4 on a system consisting of a 300mhz processor with 32 megs of ram. Think you could get those results on a PC with even double those hardware specs? Think again. PC vs. Console hardware is not a 1/1 comparison.

Re:Wii on Ebay

[supabeast!]

It makes the weathly have a better chance than the regular folks.

What's wrong with that? If the wealthy lived the same lives as the lower classes, what would incentvize the lower classes to be more productive? I don't have a Wii because some loser sat around Best Buy all night waiting to buy me one. I have a Wii because a hardworking attorney busted his butt to earn a salary that allowed him to spend less time buying one on eBay than it would have taken just to drive to the nearest Best Buy. Exceptional people deserve to be rewarded for their talent, intelligence, and efforts, not brought down to the level of people who toil at menial work and still expect easy access to everything they want.

Re:I can see why the PS3 is not in demand

[Pluvius]

He meant besides graphics. Though I would argue that modern consoles are quite different from the consoles of twenty years ago as well. Not only did enhanced graphics allow for 3D games, but increases in processing power and media capacity allowed for deeper, more complex games. I would say that modern consoles aren't that different in this respect from the consoles of ten years ago, however.

But that's where it stopped. Playstation 3 is not revolutionary compared to the Playstation 2.

I thought that myself until I actually saw PS3 games on my HDTV. The difference in graphical quality between the PS3 and the PS2 is just as large as that difference is between the PS2 and PSX. I would agree that the graphical upgrade is not as dramatic as the one between 8-bit and 16-bit or between 16-bit and 32/64-bit, but it compares very well with the last generation's advances.

Keep in mind that we're comparing final-generation PS2 games with first-generation PS3 games. First-generation PS2 games weren't a great deal better in graphical quality than final-generation PSX games, either.

[The Wii] gives us everything the PS2 did plus a whole new way to play games we've never experienced.

People keep saying this, but it hasn't been proven yet.

Rob

Retailers' lesson?

[lpangelrob]

So at some point, when will Best Buy, Circuit City, etc. figure it out and charge a 15% restocking fee for returned consoles so that I don't have to worry about nearly as many scalpers?

The fact people were able to just return the consoles free and clear means that there really isn't a cost associated with scalping, unlike with sporting events, where you have a time deadline. This shouldn't happen.

Re:Wii on Ebay

[0xdeadbeef]

Being an asshole in a self-policing community sure is a bitch, ain't it?

When people start modding you down because they're sick of your whining, are you going accuse them of censorship too?

Re:good article

[xero314]

First of all I never said you couldn't put together a resonable game machine for 3 times the cost of a PS3, just not a comparable one. Even the one you just mentioned has less media capacity, Slower bus speeds, less total processing cores, etc.

Interesting Idea using the Physics processor (which is basically a GPU dedicated to physics instead of graphics), but could you supply a list of games designed to use that physics processor?

Now what we need to do is take your cheap game rig (which looks like it will be around $1500 complete) hook it up to an HD TV and then in 5 years compare to quality of games that will run on it vs. the games that will run on the PS3. In 5 years modern games won't even run on the machine you are talking about building, yet PS3 games always will. Games will become more and more optimized for the PS3 hardware where as in the general purpose computer realm developers will expect more powerful machines to be purchased so no need to optimize.

Re:Wii on Ebay

[synaptik]

This is the problem with Capitalism in the Long Run, at least with respect to it's ultimate purpose as a method of deciding how to distribute goods. Whether its scalpers interfering with the supply of tickets, Enron turning power plants off, farmers dumping their produce in the trash, grocers allowing it to rot on the shelves, or any of many other examples, Capitalism is increasingly being used as an excuse to destroy goods rather than distribute them.

The problem here was not a failure of capitalism; the problem was Sony setting the launch price too low. At launch, demand exceeded supply. Whether that demand was from scalpers or legitimate end users is irrelevant. If Sony had said, "our launch price is $3X, but will reduce to $X by $FUTURE_DATE", then tere would be little-to-no scalper activity. Those people willing to pay a huge premium instead of standing in line would have their demand met, since the initial price would be so high as to eliminate the lines.

...farmers dumping their produce in the trash

That isn't the fault of capitalism, it's the fault of government interference in how the market prices goods. If the price of corn is too low for all the sugar farmers to turn a profit, then the problem is too many sugar farmers. And most certainly the solution is not to arbitrarily jack up the price of sugar.

And why not? As long as distribution of goods is tied to the money one can obtain for it, then artificially creating shortage through the systematic destruction of that good is an excellent idea.

There wasn't an artificial shortage of PS3s. There was an artificially low price, given the temporary supply constraints, and number of people who wanted to be early owners.

Perhaps by "artifically creating shortage through systematic destruction of that good" you really meant "artifically creating shortage by enabling scalpers to scalp." (I'm allowing you this, since no one was actually destroying PS3s, AFAIK.) In that case, a drastically higher launch price would have solved that problem.

Re:Sounds like a sure thing to me.

[Anonymous Coward]

30k? If you're going to brag about having 30k invested in various funds, I hope to god that you're under 20 years old.