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."

i hate to see this happen

[jrwr00]

I had a feeling this would happen, the PS3 is not living up to what the ps2 was able to do, the Wii by the looks of it will be on top, about time, the gaemcube was a simi-flop,

Re:

[DrunkenTerror]

Bad news for folks with a force feedback steering wheel, too. Force feedback doesn't work at all on PS3 [arstechnica.com].

Re:

[rblancarte]

I think it is WAY early to say this. I mean, the console just came out less than 2 months ago. To say that the PS3 is not living up to, expectations, other systems, etc, is being short sighted. I agree, at launch, this system is only tepid. But most systems at launch have been the same way.

Now granted, at Launch the Wii was much better positioned. But I think we need to wait long term to make a decision which systems flopped and did what they wanted to do. And more importantly, who the consumer choose

Re:

[AK Marc]

Now granted, at Launch the Wii was much better positioned.

It isn't that. The Wii is new and interesting. The PS3 is the same thing again, with new games. If you loved your PS2 and want to be able to keep buying new games like what you already have played, you have to shell out $700 for a new system. If you want some new style system with motion and even comes with a cool set of sports games that even people that hate sports games love, then you want a $250 Wii. The Wii is going to be the killer for

Previous recent thread

[UbuntuDupe]

The summary didn't like the recent thread [slashdot.org] about this, so there you go.

That said, profit margin statements can get misleading. With listing costs the same for both consoles, the Wii's profit margin is overstated. Guess what guys -- you're not going to take home the difference between ebay and the retail price, esp if you offer free shipping, as sometimes you have to do to get bidders.

By the way, if anyone knows the one-word adverb for "against the spirit of the moderation system", I'd like to hear it. App

Re:

[Chris Burke]

The summary didn't like the recent thread about this, so there you go.

One thing I found interesting is all the people in that discussion saying that it was Sony's fault for not charging more for their console, that they could have charged 3x the initial price and still sold out, then dropped the price later. Hello? Few people were buying systems off Ebay for 2-3x retail, that's why the price dropped so quickly! PS3 sold out at $600, but at $1k it wouldn't have because people don't think it's worth that m

Re:

[bnenning]

Maybe Sony could have gotten $700 or $800 out of the die-hard, but the idea that those long lines would have remained no matter the price Sony put on their console is just silly.

Well, yeah. At the "correct" price, demand exactly equals supply so they'd still sell out but there would be no lines. Not that Sony should have done this; they probably figured that the bad will they'd get from initially higher prices would more than offset the increased revenue.

So... when is Kaz getting hanged?

[IcyNeko]

I wanna know because I'd love to be the one who records it on my cell to be published on the intertubes.

Seriously, what the hell was Sony thinking?

As a side note, it really did shock me that the wii prices were so stable. Sure, there were tards out there that sold their wii for $14000 (tried to at least), but majority of the people were pretty honest folk who kept their price in the $300 range.

Re:

[c00rdb]

I sold four $500 PS3 units for $1000 each. If you did it quick enough, there was plenty of money to be made.

I'm a bad person

[Control Group]

Schadenfreude, thy name is me.

*cackle*

Re:

[StikyPad]

Hi Schadenfreude, my name is Overused Internet Cliche.

On the bright side of things

[vga_init]

Even if you bought a PS3 to sell and couldn't find the righter buyer, at least you have a PS3. :)

Re:On the bright side of things

[Joe Random]

Even if you bought a PS3 to sell and couldn't find the righter buyer, at least you have a PS3. :)

So what you're saying is that it's a lose-lose scenario?

Re:

[donut1005]

at LEAST one, maybe more.

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?!?

Re:Scalpers hurt game sales

[Chris Burke]

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

Yeah, Isaiah was really hoping to get a PS3, too, but couldn't afford the scalped prices. Mohammed managed to get one standing in line and was making fun of Isaiah all through December.

No I can't spell, why do you ask?

Re:

[Austerity Empowers]

I disagree. The fact is there are only X consoles out there, whether you paid $500 or $3000 is really just inversely related to your intelligence (and/or, your desire to spoil your child rotten, in some cases). One way or another, all consoles out there are sold. While I hope publishers burn in hell, neither they nor developers are hurt by this for two good reasons: 1) All consoles out there are sold, people who CAN buy their games, still can, 2) There aren't that many games out there, people w/these consol

Re:

[thdexter]

What are you talking about? Have you ever taken an economics course? Supply isn't meeting demand at the ordained price point, so a third party--'scalpers'--are making the market work efficiently. Someone who pays $100 above retail for a Wii clearly wants it more than someone who would only pay retail. The existence of the secondary market shows that Nintendo (et al.) aren't charging enough.

Re:

[iq in binary]

Have you ever taken an economics course?

I'm intelligent enough that I don't need to.

First off, the secondary market theory is complete bullshit. Supply and demand, remember? Raising the price wouldn't have changed the supply in this instance, but would have detrimented the demand. Trouble satiating a demand too big for you to handle is a happy problem, trust me. But in the meanwhile, the demand is still going to be there as long as you ramp up your supply at a decent pace to catch up. That they didn't charg

The PS3 is starting to stock some shelves

[stastuffis]

I'm not surprised. I've read in a ton of different places that the PS3 is making its way to the shelves (some units being returns from unsuccessful eBay sellers). And sometimes taking a few days to sell ten or so units in some places. I know the local Circuit City had 15 units for a few days although I haven't checked to see if they are still stocked. Why make a purchase online when you can just go to your local store and pick one up?

The Wii, on the other hand, is practically nonexistent in many places

Re:

[fistfullast33l]

I've read in a ton of different places that the PS3 is making its way to the shelves (some units being returns from unsuccessful eBay sellers).

I wouldn't believe all the internet rumors you hear. I was here in NYC and home in Syracuse over Christmas and most stores said they had no stock of PS3's whatsoever. Not to mention, you don't know exactly what Sony is doing with shipments and such. They said they were going to shoot for 1 million shipments by the end of 2006. This obviously didn't happen, but I

Correction

[fistfullast33l]

Whoops, I meant 1 million units shipped, not 1 million shipments.

Re:

[HappySqurriel]

The internet rumors about the PS3 and Wii systems' availability are reasonably accurate ( http://ps3finder.com/ [ps3finder.com] http://wiitracker.com/ [wiitracker.com] ) ...

Essentially, if you want to buy a PS3 for its MSRP you can (probably) make some phonecalls and find one at a store near you or you can use the link above and find one from an online store; besides camping out at a store for the next Wii shipment there is no (reliable) way to buy a Wii for its MSRP. I would assume that the Wii and PS3 shortages will end within the next

Re:

[dlZ]

I'm in Syracuse right now, and I can pretty much go anywhere and buy a PS3 without a problem. Can't find a Wii anywhere, though (I went into a local EB to buy a 360 game right after the holidays, and they had a backroom of them. Just a few days ago, the Best Buy at Carousel had a ton in stock.)

Sure you couldn't get them right before the holidays, but now the story has completely changed.

Re:

[account_deleted]

Comment removed based on user account deletion

Re:

[UbuntuDupe]

I wouldn't believe all the internet rumors you hear.

Well, believe this one.

I work with someone with a lot of disposable income who had wanted a PS3 but wrote it off as being impossible to get until March. Two days ago I pointed out the oversupply of the them relative to demand and that he could probably find one easily on ebay if nothing else. The next day he said he found one on Amazon for retail (with no tax and shipping costs) and ordered it.

Plus, I'm a failed PS3 scalper [slashdot.org].

Re:

[Joe Snipe]

why didn't your friend buy your ps3?

Re:

[UbuntuDupe]

Good question. When I picked it up, I actually completely forgot that he would have been willing to buy it. Oddly enough, I even considered calling a different co-worker, whom I knew better, to see if he'd know anybody at work who wanted one, but still didn't make the connection that someone at work had told me he was in the market for one.

Yeah, I suck.

He and I had a good laugh about that when we came back from the break.

Re:

[Roland]

Yeah I got a Wii by pure luck; a co-worker happened to be at the store when they put them out over lunch and he called me at work and basically, my office cleaned them out in a matter of minutes.

the funniest thing was the stack of 60GB ps3's sitting on the shelf nobody had been touching.

Re:

[seebs]

I have seen them in stores fairly frequently since I got mine on the 28th. Not necessarily very many, but I've seen them at one of the two Targets near my house, the local Best Buy had a sign up saying they had some in stock, see store clerk, and the local Gamestop had them.

No one has Wiis yet. The Gamestop guy said that, every morning, they have a line of people waiting in case they got some Wiis in.

Re:

[Maul]

I have seen PS3 systems in stock at Target, Fred Meyer, and Circuit City in my area. I saw these while looking for an S-Video cable for my Wii.

When I mentioned my surprise of a system being in stock when I saw it first at Target, the clerk informed me that the system was a return. Not sure if he was correct or just talking out of his rear, but the fact was that the system was there.

In each case, the PS3s were in plain view, sitting there in the store display. I'm sure they are selling them, but it is cle

Re:

[vapspwi]

I happened across a Wii at a Target last week, but I've since visited a lot of Target, Wal-Mart, Best Buy, and Toys R Us stores looking for Wii accessories and another unit for a friend (his wife finally found one yesterday after visiting about 15 or 20 stores).

I've seen a number of PS3s. I wouldn't say they're plentiful, but (for example) one evening at the Fayetteville, GA Target, Wal-Mart, TRU, and Best Buy, I saw 6 of the 60 GB units sitting on the shelves. So it appears that the demand for PS3s is cl

Re:

[coolestdickofall]

I too found a couple Wii's on the shelf at target last week.. Have never seen a PS3 in stock here in Sacramento..

Re:

[dulinor]

In many places you can absolutely walk into a store w/o pre-order or call ahead, find a PS3 and walk out with it for retail w/o Bundle. I did that twice (once for a buddy who I knew was jonesing for a PS3.) I was hunting for Wii's (without success I might add) I don't know how many shipments Sony has made, but random Gamestops around here have been getting several a week and seem to have pretty good availability right up to Christmas. Presumably even better now.

I think the scalpers/speculators had every rig

Re:

[AK Marc]

I wouldn't believe all the internet rumors you hear.

At Bestbuy.com, they claim to have 60GB PS3s in stock now, for sale at the list price. So, if the availability is the same, where can I get my list-price Wii (and no, no packages with $500 of extras, just the base system of each)? If you can't find me a place where I can order a Wii today that claims to have them in stock, then we will consider this rumour as confirmed. PS3, available and easy to get. Wii, still sold-out and back ordered almost every

Yessir

[xlordtyrantx]

I went to a Wal-Mart the other day, looking for add-ons for the Wii. The only thing that they had available was the Classic controller add-on. No systems, no controllers, nothing. But there were two PS3's for sell, several controllers, ect.

Re:

[DeeDob]

The Wal-Mart i find funny is the one next to my home.

Twice when i was there in the last 2 months i heard over the intercom:

"We have just received a shipment of X number of Nintendo Wiis. If you are interested, please report in our electronics department."

To me, i heard:
"We have just received a shipment of X number of Nintendo Wiis. If you are interested, please come and fight for it with other entousiasts in our electronics department".

Sure enough, because i was curious, i went to the electronics department

Economics 101, courtesy of Sony and E-Bay

[lpangelrob]

Funny, I was just looking at the PS3 sellers on e-Bay. This [ebay.com] particular story is a funny read if you have some time at the office (and who doesn't, if you're reading this?) I couldn't help but think of Nelson and "ha ha!"

Speculators, meet the hard rock of economics.

Re:

[Duds]

I know. All these people are trying to do is fuck over people who might actually want a system so I'm very happy to see it come crashing down around him.

Re:

[bnenning]

All these people are trying to do is fuck over people who might actually want a system

There are not enough systems to satisfy demand. Thus, the price is going to rise. Some people pay this additional price in time tracking down shipments and waiting for hours outside stores, others pay in money to scalpers (who themselves paid in time). I fail to see why one is worse than the other.

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

[AK Marc]

There are not enough systems to satisfy demand. Thus, the price is going to rise. Some people pay this additional price in time tracking down shipments and waiting for hours outside stores, others pay in money to scalpers (who themselves paid in time). I fail to see why one is worse than the other.

In Simpsons episode "Homer Loves Flanders" Homer stand in line to get tickets. He is second in line, and thinks he has a good chance. The person in front is a scalper that buys them all and it is sold out with the first purchase. That's what happens here. If the scalpers didn't buy them in large numbers from the stores, then the availablility would be better and the price of those sold would be at a lower price. The bottom fell out because scalpers were hoarding them, and when the price got to the point where they had to liquidate to ensure they didn't take a loss, the prices dropped very quickly. The shortage was more like the "sold out" situation in the Simpsons. It was artifically created by the scalpers.

When the cause of the problem gets screwed by the problem that they created, "good" is the thought running through my head. They were profiteering off a shortage they helped create.

Re:

[thdexter]

Oh, I'm pretty sure that's a false analogy. In the Simpsons scenario, the guy ahead of Homer could only buy the tickets if there were no per-buyer limits and he had the funds to buy all of the tickets (I recall that there's a joke where the scalper says he only has $10 on him and is allowed to pay the clerk back the day after). In this case, almost every ad I saw said "limit of 2 per person" or some such language, and besides which, there *still* has to be demand for a Wii at $300 over demand for a Wii at $

Re:

[arakon]

Queue
Nelson: "HAAAA HAAAAAAAAA"

Karma is a bitch.

Re:

[DesertBlade]

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

Re:

[digidave]

That story is a lie. They guy could have returned the PS3 to best buy and had the refund put on his debit card even though it was originally purchased with a different debit card. What do you think people do when they switch bank accounts?

I've returned things and had the refund put on a different debit card a few times. A couple of times I just wanted the money in my other bank account and a couple of times I was returning something my wife had purchased.

Re:

[Cheeko]

Does this guy sounds like the type of witty wonder who would think to put it on his own card while sitting at the store? Reading this he sounds about as sharp as a bowling ball.

I'm guessing they would have very easily put the money onto a different debit card, so long as he had the original reciept and it was still in the packaging.

Re:

[hayden_l]

When I return items at the Bestbuy in Hawaii as soon as they see debit card on the receipt they just hand me cash. Haven't had one yet try and put the credit back to the debit card. I know each retail store has it's own interpretation of policy but is it really this different?

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.)

Re:What grey market?

[UbuntuDupe]

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

So what would you say is the appropriate metaphorical color of the ebay resale market? Would you be happy with calling ebay sales "off-white"? Beige? Light green for that tinge of capitalism?

Re:

[genericacct]

It would be the secondary market. It's already been sold retail.

Re:

[GoodbyeBlueSky1]

So what would you say is the appropriate metaphorical color of the ebay resale market? Would you be happy with calling ebay sales "off-white"? Beige? Light green for that tinge of capitalism?

When I think of eBay scalpers the color brown comes to mind. Big, steaming piles of it. So I'm going with "Brown Market". With bits of corn.

Re:

[Guppy06]

Considering the money being lost, I'd say "red."

Quit the whine

[imsabbel]

Seriously.
Whatever you buy, you are free to to what you want with it, as long as you dont violate rights of others.
Its MY decision if i lock up the PS3 in a cabinet, burn it in a bonfire or put it on ebay.

Same with concert cards.
If people are that desperade to consume a shitty performance, maybe they should sell the cards for more money to begin with, or use a bigger place. Or more events.

But i guess people dont have real problems, so they have the push those non-issues.

Re:

[flitty]

If anyone wants a PS3 in Utah, i don't have a problem finding one at any store in the greater slc area. I've seen several. Still no Wii's.

Re:Quit the whine or why the police have my name

[WillAffleckUW]

Whatever you buy, you are free to to what you want with it, as long as you dont violate rights of others.
Its MY decision if i lock up the PS3 in a cabinet, burn it in a bonfire or put it on ebay.


I see. There are laws against burning certain devices containing mercury under federal laws, as well as most city and county and state regulations regarding disposal of materials containing hazardous wastes.

This is why you don't see people burning their cars intentionally on the streets when they buy new ones.

Re:

[644bd346996]

This is why you don't see people burning their cars intentionally on the streets when they buy new ones.

No, it isn't. People refrain from burning their old cars because they still have value as a vehicle or for resale or scrapping. Burning your old car is the least economically sensible option, and that is why the practice is unheard of.

Environmental laws only come into the picture after the car owner has abandoned the concept of rational self-interest.

Re:

[WillAffleckUW]

It's also illegal and will get you into jail for a period of 3 to 6 months. Burning toxic substances is a felony in many areas.

Re:

[Telepathetic Man]

Not to mention the many local laws stating that arson, or destruction of property, whether it is your own or not, is a fine-able offense. I've seen it used as a way to slap wrists when no other option is available.

Re:

[Andy Dodd]

I would be shocked if the PS3 (even the US version) wasn't RoHS-compliant.

Wii Dropping Too

[NetJunkie]

The price on Ebay for the Wii is dropping too. I finally bought one last night for $335 from a local buyer. There are a number of tools out there to find someone local so you don't pay shipping and no worries about what you actually get. $335 is only about $60 profit for the guy after he paid $250 + tax. I didn't even sit and wait for the BEST deal as they were all falling near that anyway. A few days earlier the average was $400 or a little more.

Re:

[ReptilianSamurai]

Ok I know these jokes are getting old, but "Wii dropping" still made me laugh. I'm glad I managed to snag a Wii at launch. Had to try several stores, but managed to get a spot in line at a Best Buy. As for the PS3, nobody is going to buy it until it gets a few killer apps and a price drop. I know I will want one in time, if only to play the next Final Fantasy. But not before it is affordable. For now I'm happy with my PS2 and Wii.

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:

[metamatic]

And then one of the losers reported him to the FBI for running an unlicensed gambling ring via the Internet, and he ended up in jail?

Too bad this is illegal

[Proto23]

Otherwise I would know a great strategy too: selling fire insurances to make sure your store doesnt burn down tonite.

Re:A seller's interesting strategy.

[Lehk228]

that's called a raffle, unless it's to raise funds for a non-profit org it is illegal in most of the country.

Re:

[catprog]

If it is like in Australia. If you are for profit you cannot make a profit on the raffle.

An example is you have a $400 item you can sell no more then $400 work of tickets.

And how many were scammed?

[flibbidyfloo]

I work with a guy whose sister thought she'd cash in by buying two PS3's and selling one to pay for her own. She put one up on eBay and someone bought it. Not being terribly eBay saavy, she didn't realize that the email she then received from "Paypal" saying funds had been transferred and to go ahead and ship the unit to Nigeria was bogus.

Now she's stuck trying to enjoy the PS3 that she basically paid $1200 for.

PS3 vs Wii at local Toys'R Us

[Yvan256]

I was at Toys'R Us yesterday, searching for the elusive component cable for the Wii (I had it on my GameCube, and I can't stand the crappy composite picture from the Wii anymore).

Guess what? No component cables, no Wiimotes, no Nunchucks. Only half a dozen classic controllers and games. But no Wii consoles.

And what do I see on a bottom tablet nearby? Four 60GB PS3. Normal people don't want to pay 680$CAD for a game console. Toys'R Us was still taking names on their list for the next shipments of Wii console

Component Cable

[MonkeyCookie]

Try ordering it from Nintendo.com. I did just that before Christmas, and I got the component cables within a week (well before Christmas day). You won't have to run all over trying to track one down.

I ended up getting a second remote/nunchuk direct from Nintendo too; However, I ordered at the beginning of December and didn't get them until about 5 days before Christmas.

Re:

[wbren]

You might also want to check out this page [arstechnica.com]. It lists a bunch of different places to buy Wii component cables. I bought the MadCatz one for $19 and received them in less than a week!

Re:

[atomicbloke]

interesting!

Re:

[wiiboy]

I was at my friends house over the holidays and we agreed that we like the Wii over PS3. Curtis Somoza and I prefer the Wii because it is more interactive. With games like bowling and golf you actually feel like you are playing the game.

Re:

[wiiboy]

Have you tried ebay? You might pay an arm and a leg but at least you'll get them.