PlexNex

Game Console Pricing

Lines went around the block in Tokyo on November 11th as they did on November 17th here in New York for the launch of Sony's PlayStation 3. But today the GameStop on Manhattan's Upper West Side is subdued and no arbitrage opportunities remain for sellers on eBay as prices there have reverted to retail.

The media are playing the Sony recovery story (see The Economist, below) and have noted how the pricing differential between the players reflects the different embedding strategies of each conglomorate.

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PlayStation 3 ("PS3") offers gamers the premium gaming experience (in two configurations, $100 apart) and provides Sony a way to embed the new Blue-ray DVD standard into lots of households. Each of the earlier iterations, PlayStation & PlayStation 2, had sold over 100 million units in their time. This sets the long-term expectation for PS3.

xBox 360-- which got out the door over a year ago and has sold well -- offers Microsoft a way to embed more or less of a networked PC in the family fun space.

Nintendo's Wii seems to have the most clever insertion strategy of all. Low-priced Fun! (MBAs will take note in their day-planners.)

 

Source: Hiser Sneaker Research

I grokked the price reduction for PlayStation 2. The **NewImproved** pricing of PS2 makes way for the hot new PS3. Gamers will probably have a high utility for PS2 for a while, value-priced at $129. This betters the cost of a few Frappacinos by only a hairsbreadth. And, for Sony, these late PS2 sales are all profit.

PlayStation 3 Ships

You thought e-mail was addictive, but The New York Times reports 3-day lines forming on Madison Avenue outside Sony Plaza for the release of Sony's brand new PlayStation 3. The fresh machine retails for $599, but the going price on eBay is -- give or take -- $2,100. (The difference could pay a few months rent...in Queens, circa 1992.)

Scoble reports longer lines in San Francisco than for the xBox event in recent memory.

Sony PlayStation has about 60 percent of the console market today. Yankee Group projects Sony to give up share to xBox by 2011, but that's a paid guess by my reckoning. Sony gaming czar, Kaz Hirai, was smart enough to praise the study (Gamespot).