Saturday, December 23, 2006

Did the PS3 and Wii Kill Christmas?

That's an interesting question, and I'm wondering about that now...

Think about it for a second. The things that have been blared from the nearest rooftops-end to end, corner to corner-has been that you absolutely must have and no hesitating!!! the PS3 and the Wii. And, both Sony and Nintendo know this, and delibrately starve the supply. I do think that Sony is more guilty of this than Nintendo (the PS3 is pretty much the ONLY thing that is making Sony a profit these days), but the artificial supply deficit means that you have people fanatically waiting out in line...which creates the appearance of heightened popularity.

Remember, a lot of the people there have said-more or less-that they're buying a PS3 to resell on eBay or Craig's List. They've brought family to get around the "one PS3 per person" rule, to get enough of them to make a good profit (hell, you can just search for PS3 on eBay and they're going for $1000+ per system. Assuming $700 for a unit, and maybe two games, that's at least $200 profit per system, a return of 25%). Add to that you can't just buy a PS3 in some places-the ads at WalMart and such are "packages" with at least two games.

So, you have these massive, massive crouds, waiting for the systems to come on sale. And, Microsoft is laughing to the bank-they have the play-proven XBox 360 with games that don't have the teething/"pretty much a slightly redone earlier system game" problems that a new system already has. They don't even have to lower their prices that much-there are XBox 360s for sale out there.

Who wants to wait in those lines? Who wants to fight those crowds? So the brick&mortar stores lose money-and to try and get what little sales they get, they don't try to get people in with lower prices. Or create bundle deals that would remove most of the "sale" price... (ex., CompUSA had a $200 laptop. It wasn't a bad laptop for the price-but to get it and the discount from the price they had it (about $699 or so), you had to buy a new Motorola RAZR phone, activate it on-site with Cingular, and pay all those other fees...).

You want to know why people go to They get good prices, without this kind of game-playing.

So, sales are down. And, outside of the PS3 and Wii...there is nothing that is "must have". There's no Furby, no Cabbage Patch Kids, no Tickle-Me-Elmo that has the public imagination grabbed. The market for MP3 players is pretty saturated, a fact that the Zune hates. And, there isn't any real market for TVs that has people going out and buying...

Christmas isn't dead. But it has been wounded.

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