From
http://www.theglobeandmail.com/servlet/story/RTGAM.20070205.gtgamer05/BNStory/Technology/home :
How a PlayStation speculator misread the market and lost:
PS3s gather dust in man's home after buying frenzy fails to materialize
PlayStation 3 has it all: a Cell Broadband Engine chip, a built-in Blu-ray disc player, a 60-gig hard drive and full online capabilities. For Derek O'Brien, it was a no-brainer.
On Nov. 16, a day before the system's launch, Mr. O'Brien left his construction job and began driving on Highway 401 toward Toronto. His plan was simple: pick up one or two PlayStation 3 systems, advertise them online and sit back as the sure-to-be hot -- and scarce -- commodity gathered steam in the chug toward Christmas.
Instead, the first-time scalper learned an expensive lesson about consumer demand and when to take a profit. Now that the dust has temporarily settled in the busy gaming marketplace, another lesson is coming into focus: Mr. O'Brien might have backed the wrong box.
But none of that was clear as lines formed at video game stores across North America on the eve of the launch. Mr. O'Brien called every Wal-Mart, Future Shop and Best Buy along Highway 401 from his car to gauge the length of the lineups of hardcore gamers and profiteers awaiting the powerful new PlayStation 3's release. He shied away from imposing queues in and around the Toronto area at Scarborough, Concord and Markham before settling on the Wal-Mart in Peterborough, an hour's drive northeast of the city. He arrived at 2 p.m., good enough to snag the fourth spot in line, "looking like a bum" in his work clothes until his girlfriend brought him a fresh outfit and some food.
The 23-year-old stood in line all night and at 7 a.m. the next morning, it paid off. He got his hands on two of the coveted machines, both 60-gig models, one bought legitimately at the store for $659 plus tax, the other acquired on the spot from a scalper, for a steep $1,800.
The hard part done, Mr. O'Brien thought he could sit back. He would flip the PlayStation 3s just before Christmas when demand was at its peak and use the profit to buy an engagement ring for his girlfriend -- the one who brought him the clothes and the food, whom he has been dating for seven years and whom he has known since Grade 2.
But two months later, the sleek PlayStation 3 units are collecting dust in Mr. O'Brien's closet in Bowmanville, Ont., while his girlfriend is still without a ring, although Mr. O'Brien repeatedly refers to her as his wife before correcting himself each time. He is looking at unloading the systems for as little as $600 each to buyers on the on-line classified service, craigslist.org, which would roughly amount to a $1,360 loss.
And the part that's haunting Mr. O'Brien. It didn't have to be this way.
Mr. O'Brien saw the market for PlayStation 3 systems soar initially after their launch, with the units fetching anywhere from $2,500 to $5,000 in eBay auctions. Still, with a month until Christmas, he waited. And waited.
"I just kept thinking, 'keep it until Christmas,' " he said. "And that was a mistake. A huge mistake."
Even before Christmas arrived, demand for the system started to decline. Sony managed to keep up semi-regular shipments through the holiday shopping season, which kept customer demand from ranging into the hysterical.
"I think a lot of people expected us just to ship on Nov. 17, so that no one would be able to buy them through Christmas and you'd see the insane eBay auction prices building up," said Matt Levitan, marketing and public relations manager for Sony Canada, who also said the company had shipped 1.1 million units to North America by the end of December. "We spoiled a few plans for people looking to make a big profit on the PS3."
Mr. O'Brien tried auctioning the systems on eBay in the United Kingdom, which won't see the official launch of the PlayStation 3 until March. It looked as though he was going to make a tidy profit, until eBay yanked his ads and suspended his account for trying to beat Sony to the punch in the British marketplace.
After the holiday season, with some retail chains well stocked with the system, Mr. O'Brien faced an even less promising market.
Jason Canam, a clerk at one downtown Toronto game retailer that has two PlayStation 3 systems, said the store hasn't seen much of a demand for the new console. In fact, he has seen a handful of opportunistic profit seekers buy the system only to return it a short while later.
"It's really common to see people buy it, put it on auction, and then take it back," Mr. Canam said. "It just sits on the shelf. [Nintendo] Wii's don't, [sit on the shelf] because they have more to offer. They have what most gamers want."
Gamers like Eric Butler, a 16-year-old high-school student from Thornhill, who thought he and his cousin had hit the jackpot when they stumbled upon a pair of 60-gig PlayStation 3 systems in Toys "R" Us about a week before Christmas. They nabbed both, one of which they sold quickly for a $100 profit. They could not sell the other system as easily. Eric entertained offers until mid-January on craigslist before he took the second system back to Toys "R" Us for a refund.
Mr. Butler says he wasn't tempted to unwrap and play the PlayStation 3 because it was "too expensive" -- he'd already bought his next-generation console of choice, Nintendo's Wii (which retails for about $279).
Mr. O'Brien, a casual gamer, was similarly uninterested in playing the system. But he found out too late that he had only a 30-day window to return the unopened consoles to Wal-Mart for a full refund, and now finds himself saddled with a pair of prohibitively expensive toys that many want to play, but few can afford to buy. They're two immoveable objects serving as a reminder of his best-laid plans going severely awry.
