02/25/2007

Associated Press

Damien Bevando planned on plush profits after buying the coveted Sony PlayStation 3 video game consoles during the system's much-hyped launch last fall. He thought he would more than double his money selling them online.

"I want to give my wife and three kids a really good Christmas," Bevando said outside the Best Buy store in Bend on Nov. 15, two days before the launch of the PS3. He added that each $600 unit could fetch as much as $2,000 on online auction sites.

But it didn't pan out.

"I lost money on that deal," he said of the four PS3s he bought. "I definitely wouldn't have bought them. The whole thing was just a nightmare."

Bevando said auction prices of PS3s quickly fell from the $2,000 range to less than $1,000 within days, hardly worth the hassle and costs.

Many sellers held out, hoping that the holiday season would see a rise in demand, Bevando said. But that didn't happen, and many of the consoles were fetching less than $100 over the retail price, while some prices were below retail.

The resale flop was common elsewhere as buyers lined up, sometimes for up to four days before launch, in hopes of big resale profits.

Charlynn Snoke, a Bend stay-at-home mom, camped for two nights outside Best Buy with five relatives to buy PS3s.

Online prices were so poor that Snoke returned five of the six they bought for a full refund, keeping one for themselves.

"We thought that, as time went on, that people (would) bump up our prices," she said.

But other people had the same idea, and a rush of resellers quickly saturated the online auction market.

Of the 20 people lined up outside Best Buy on Nov. 15, only three told The Bulletin newspaper they planned to keep their purchases. The rest hoped to resell at a profit.

The fact that the console is readily available in Central Oregon hasn't helped.

In comparison, Nintendo's Wii console - a major competitor launched two days after the PS3 - remains hard to get.

"The Wii has definitely been more popular," said Debra Walls, manager of the electronics department at Wal-Mart's Bend store.

Industry records show Wii's North American sales in the last two months of 2006 at 1.8 million against about 750,000 PS3s.

Michael Pachter, research analyst with Wedbush Morgan Securities, said that the PlayStation's price has kept it more available.

"It's $600," Pachter said. "It's not an impulse buy. You're not just going to march into a store and pick one up because your kid wants one. With the Wii, it's $250 with a game included."

For resellers like Bevando, the PlayStation 3 remains a painful lesson in business basics: supply and demand.

"Everyone in line was saying that it was going to sell for a lot of money," he said. "And what happened was they waited in line essentially to lose money. I think a lot of people got stuck with them because they couldn't sell them."

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Information from: The Bulletin, http://www.bendbulletin.com