Grey Markets Compared - PS3 vs. Wii

Kotaku has a follow-up feature to their earlier look at the declining PS3 market on EBay. Post author Michael Fahey has now gone back and looked at Ebay sales, comparing the PS3 and the Wii. Unlike the sharp dips and spikes the PS3 market has suffered, the price seems to be fairly constant for the Wii console. From the article: "Considering the small window that the PlayStation 3 auctions had to turn a truly amazing profit, prospectors would have been better off in the long run purchasing a couple of Wiis, which have maintained an average profit margin of 45-50% since preorders became available. Definitely not a windfall, but a much more financially sound investment in the long run. Unfortunately these launches weren't about being sound financially. They were about betting on the big bucks, and the majority of the PS3 prospectors out there played the tables and lost."

Scalpers hurt game sales

[Telepathetic Man]

I suppose not one of these console scalpers cares that they hurt the market for the games on these machines. That extra $50-100 in price that is being forced on early adopters of the new consoles hurts the game publishers and in turn the consoles and the market for those consoles.

I mean really, would someone please think of the profits?!?

What grey market?

[Andy Dodd]

eBay scalping of systems bought in the U.S. to U.S. customers isn't grey market. It's just plain scalping.

Grey market is stuff like Lik-Sang and similar companies selling Japanese versions of consoles to U.S. customers for the purpose of playing import games.

The most common example of "grey market" sales is in the photography industry, where "grey market" imports of cameras are often cheaper than the U.S. version of that camera. Of course, you get what you pay for, and in this case there is no warranty support for the "grey market" cameras and often repair shops will refuse to even touch the grey market units (because they'll lose their certification as an authorized repair shop for that particular manufacturer if they do.)

A seller's interesting strategy.

[Puchie_D]

I won a Wii on eBay for $40. Yes, forty dollars. And the seller actually made double what he bought the Wii for. Here's what he did:

Instead of selling the Wii for $450-$500 and (Zelda:TP thrown in), the seller was instead selling cards from a 52 card deck. Each card cost $20.00. When you bought a card, the seller would write your ebay name on the card and put it in a sack.

At the end of the auction, if at least 26 cards had been sold, he'd pick a card out of the sack and they would then be shipped the Wii. If he hadn't sold 26, he would have refunded all the money.

So I bought two cards because I had some spare cash, won, and I recieved my Wii in 3 days. All but one person left positive feedback for the seller's unique selling strategy.

Instead of selling a Wii and game for 450-500 (retail 250 + 50 = 300 ), he ended up selling 30 cards for $20 each. He got $600 and I only spent $40. Win-Win situation, if you ask me (except for those who lost $20 with nothing, but hey, that's gambling).

Re:Economics 101, courtesy of Sony and E-Bay

[DesertBlade]

Be sure to read the guys ebay history.....looks like he has other issues besides owning 2 PS3s