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Shortage economics = bad news for you

We already know there’s going to be a PS3 shortage when the system launches worldwide in November. Is there any answer?


Joystiq has posted an insightful — and depressing — conversation with a mom & pop gaming retailer on the economics of a console shortage. When the Xbox 360 was in extraordinarily scarce supply last holiday season, the store owner stopped selling 360s on his shelves, and put them all on eBay. He fetched double the retail value on all of those units, and apparently plans to do the same thing with the PlayStation 3.

We already know that the first month’s worldwide shipment of PS3s will be about 1 million, which means the U.S. and Canada will probably get a little less than half of that (the rest will go to Japan and Europe). Although Sony’s production plans put it a little bit ahead of the Xbox 360’s disastrous launch shortage, there’s still no question that there will be far too few PS3s for the first few months it’s on the market.

So what do we do? Is there any way for consumers, retailers or manufacturers to solve this problem, or should we just accept it and get in line, like we do for a sold-out blockbuster film? During the Xbox shortage, one of our favorite online mags ran a series on Xbox economics (part 1, part 2), which started off with a premise we know all too well:

Yet, for economists, the Xbox 360 crisis is more alarming than a conspiracy, because these supply shortages make no economic sense whatsoever. Despite their suspicious regularity, the shortages benefit nobody.

The series offers up a few suggestions, like raising the retail price or selling the whole first shipment directly through auctions, so that Sony/Microsoft can pocket the difference, rather than giving it to guys like Joystiq’s local game retailer. It also applies a nice quote from Napoleon on the whole conspiracy theory thing: “Never attribute to conspiracy that which can be explained by incompetence.”

It’s that incompetence that will prevent Sony from experimenting with our favorite shortage-busting plan: launch in the summer. Hardcore, early-adopting gamers obviously make up an important part of PS3 sales, but Best Buy is swamped because parents need a Christmas present, and a next-gen console is the coolest new thing.

If Sony could have actually achieved a spring or summer launch, as they had planned, they might have seen less of a rush from the holiday-shopping crowd. And although that wouldn’t alleviate the lines at the store, it’d take away the “I didn’t get what I wanted for Christmas” aspect of it all, which is the horror that causes grown men and women to get in fistfights over Tickle Me Elmos.

Launch it in June, and by the time the holidays roll around, there will be so many PS3s on shelves that every little kid in the world will be happy. And maybe we won’t get extorted by store owners!

• Mom & Pop plot to screw you out of a PS3… and put food on their table [Joystiq]

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