Sunday, November 26, 2006

Playstation 3

With the recent chaos over the release of Playstation 3, a question arises: why are there long lines and sell-outs of the new game system? Instead of people selling the new game consoles on eBay for thousands, why wouldn't Sony either produce enough to meet the initial demand or raise the price? How is their current strategy of selling out profitable? They knew this was likely to happen because the exact same thing happened last year with the XBox 360.

Some of the examples of the extremes of the launch:
  1. Long lines waiting to get the PS3.
  2. People were robbed and a man was shot while standing in line to buy the game system in Connecticut.
  3. People are selling consoles for thousands on eBay (and in this case, the people who bought the system initially are getting profit that Sony could have gotten by charging a higher price).
  4. One person even sold merely the information of someone who was willing to sell a PS3, not the actual game system, for $1,100.
When you offer a possible answer, it should be from the perspective of Sony: why would they go against the basic principles of economics by not meeting the demand for the game consoles?

(Source: James C.)


Anonymous said...

Well actually i know that at this point PS3 is losing money each one they sell. The truth is the new technology is too advanced. plus the Blu-ray players are already more expensive and people dislike that they are forced to pay extra for something they don't want. its true Sony is in a pickle but many underestimate the power of the MOM. When child sits on St. Nick's lap and asks for a brand new PS3 for Christmas. Few parents can ruin a kid's dream. i believe that sony banks on this release where they run out now they will have some for x mas..or they'll still make a ton of money later cause thats how it works


Anonymous said...

when the people know that sony is onyl going to make so many ps3, then the demand for them goes through the roof. video gaming is so popular these days that nearly every family has someone that wants one(primarily boys). Like drew said, you have the insane moms that are whipped by their children too. Im sure sony did not intend on people shooting/stabbing each other over a video game system but they know now. I dont think sony knew exactly how much people wanted this system, otherwise i think they would have released more. now they have started shipping 100,000 in every week on private jets until christmas. I disagree with what drew said about the blu-ray comment though. Blu-rays are selling for 1000 on the market right now so why not spend 400 less and buy a ps3. you also get to play games on it too. blu-ray was built into the system to make it uniquely different from the xbox 360 b/c you play in HD and you can also WATCH movies in HD. Blu-ray looks incredible by the way, i watched one the other day. I think Sony did this to keep their customers wanting the ps3 more and more which leads to more money for sony. they should know the demand better next time.

Anonymous said...

oh yeah that was AUSTIN LINTAULT^^^^^^^^^

Anonymous said...

Even though Austin says Sony did not intend on people getting so ridiculous over the game, they probably counted on it. We've all watched the hype (and actions of the buyers) get progressively worse with each additional gaming system to hit the stores. It's free advertising! I think I've seen only two ads for PS3's since they came out. (Might I add they are extremely creepy and if Sony wants to continue selling them they should stop scaring customers with crying baby dolls) People see how desperate some can be to get these systems which in turn makes people want them even more. I agree with drew and the spoiled child theory. I mean c'mon...who wants to be the kid with the PS2? Either way, Sony knows what they're doing. The oh so convenient "glitch" or whatever I just have a hard time believing. They probably already have the prototype to ps27 or something by now anyway and are just waiting it out...

Anonymous said...

I agree with Lauren and Austin on this one. By creating such a scarcity of PS3s on the market, demand as a result has skyrocketed. With such a high demand for a product, this gaming system is the hot buy of the Christmas season, and as a result every kid on the block will be begging for a PS3 under the tree. Parents' determination of finding a PS3 will carry along past the holidays and into the spring season when more shipments come in. As a result, parents who were desperate to find a PS3 for the holidays will still be eager to please their kid with one even in the spring. Also, with all these effects such as long lines and fights, the media has been pouring attention over to Sony and its console. As a result, Sony is able to sit back and watch as Newspapers and Internets fill their sites with the PS3 names not on a small advertisement, but rather front page news. eBay is overflowing with auctions for this console (giving Sony even more advertisement), and sites such as are humorous yet actually beneficial to the company.

Nick Wellmon

Anonymous said...

One possible reason why Sony comes out with a limited production is because it always keeps the demand high for its product. With limited production people will be more willing to buy them and they will make more quantity sold. They could increase the price of the systems and they would probably make more money, but they came out with a limited production to increase demand and publicity. The PS3's are the hottest item this summer and people wait for hours to get them. The idea of low supply leads to an extremely high demand

Chris Templin