Did the PlayStation 3 Truly Launch on Friday?

By Scott M. Fulton, III, BetaNews

November 17, 2006, 4:06 PM

Certainly it was an event that merited coverage on a national scale. The top three events on morning TV news programs this morning were the Senate debates over how to proceed in Iraq, the infighting among the new Democrat majority in the House, and the lines outside electronics stores full of people waiting for a chance to purchase a Sony PlayStation 3.

But unlike a big movie premiere, where hundreds stand in line for hours knowing they definitely will get what they came for that night, prospective PS3 customers could not be assured of fulfilling their wishes. Nor, as it turned out, was everyone waiting specifically because they wanted to be the first to play the PS3. As television and newspaper sources - including the San Jose Mercury News - both discovered easily, and to their amazement, some of the first in line were bragging about how much they'd be able to reap after they turn around and hock their newly purchased wares on eBay.

As Dean Takahashi reported on the Mercury News blog, the very "first dudes" in line in front of a special launch distribution at a Sony-owned shopping complex in San Francisco consisted of a group of college students who told him their exclusive purposes for being there was, first, "notoriety" (the chance to be on the news) and to make a killing on the eBay sale of multiple PS3s. Up until that "killing" takes place, they may have time to squeeze in a game or two. (Unlike automobiles, used PS3s don't seem to instantly depreciate.)

In Houston, NBC affiliate KPRC found several more people in line, waiting for what they described as a chance to triple their investment in a few days' time. "It's not that big of a deal to wait when you're talking about making $1,500 in a night," said one.

The first fellow in line outside Sony Plaza in New York City, according to The New York Times this morning, just happened to be a day trader - a person who makes a living buying and selling stocks, and certain other investments, once they've rapidly gained value in the short term. You might think this would be an investment purchase as well. But it's probably lucky for Kaz Hirai, the CEO of Sony Computer Entertainment America, and Sir Howard Stringer, CEO of Sony Corp. - whose smiling faces appear blurred against the background of their #1 customer in his Times photograph - that his immediate plans were to go home, shower, and play a game.

By mid-afternoon Friday, auction prices for the PS3 on eBay ranged as high as $3,000, with same-day guaranteed shipping. It wouldn't make any sense for anyone to pay that much and have it shipped next week.

Even the site manager of the newly-rechristened PS3News.com (formerly known as PS2NFO.com) admitted temptation. "I managed to get one of only four pre-orders from my local shop - the coveted 60GB PS3 console!" he writes. "It's VERY tempting to EBay it, however, as I purchased it today the store manager informed me that they didn't know when they would be getting more in - and it could very well be after Christmas."

That Sony will easily sell every PlayStation 3 it produces is a very safe prediction. During the early part of this year, when PS3 was first delayed, another safe prediction was that the company would only produce limited numbers during its initial run. The fact that Xbox 360's initial numbers were unexpectedly limited, and that its launch last year ended up widely perceived as botched, did little or nothing to dampen the present level of enthusiasm for that machine. So although the PS3's launch numbers are even more limited than Microsoft's, even if it goes down in history as a debacle, it probably couldn't derail enthusiasm for the machine next year - by all accounts, a magnificent machine that raises the bar on aesthetics in gaming, and also serves as the centerpiece for high-definition home entertainment.

Yet with the company having said it might only have produced 400,000 units for launch in Japan and North America today, and some analysts fearing that number could actually be as low as 150,000, one wonders if those lines of people that made the front pages of newspapers and the promo beds of newscasts might not disappear after today. At a local Best Buy store in Indianapolis, for example, where no violence took place, a line of 42 people had been assembled for reportedly over 24 hours, to receive guarantee tickets for the purchase of 28 units shipped. Many of those turned away told reporters they'd be back tomorrow.

But that Best Buy probably won't be getting another 28 units tomorrow, or the next day, or maybe even the next week - managers could not say.

In response to our story yesterday on iSuppli's PS3 teardown analysis, a reader who works at a Futureshop retail outlet told us yesterday his store was slated to receive ten units, though there were already 15 customers camped outside his store. "Of course we can't tell customers that," our reader wrote.

"To any of you planning on waiting outside Best Buy, Wal-Mart (if they didn't do preorders), Futureshop, Blockbuster, wherever," he continues, "Yes, I realize you can easily eBay it back for double the value, even triple to some very rich kid, but if there's already 15-20 people waiting there, chances are half of them aren't even getting one. Please, take my advice. Don't bother."

While Sony has publicly predicted it will sell one million PS3s worldwide before March, the company has declined to comment on whether it intends to produce one million units before that time.

Big lines have always been part of the self-promotional mechanism behind a big, new product launch, as toy manufacturer Fisher-Price proved in 1996 when it reaped back well more than it had paid to wrest the lucrative Sesame Street contract from Playskool, by engineering a tremendously successful limited launch of the "Tickle Me, Elmo" doll. Since then, big launch parties and limited supply quantities have regularly been carefully and meticulously arranged in order to drive sales through "viral marketing" - customers exciting one another into making early purchases, for fear the opportunity to meet the Christmas deadline won't come around again.

But Sony's current limitation on PS3 quantities aren't by choice; it would easily have preferred to produce far more - enough for the console to have launched in Europe this week as well as North America and Japan. If campers outside retailers stay huddled outside - even if only a few - for days on end, and sporadic violence continues here and there around the US and Canada, and eBay prices continue to soar into the stratosphere, Sony's inability to supply its customers could remain a news item well into next week, perhaps generating a kind of viral marketing meltdown.

In which case, there could possibly emerge from this episode a sort of launch party burnout, at least for the next few years, on the part of companies hoping to avoid the appearance of trying to replay a failing scenario.

It's at this point that Sony must invest more than its faith, but perhaps more effort, behind the production and distribution of something consumers have shown little of in recent years: faith itself, that the product will eventually be here, and that its ingenuity and capacity for excellence will have been worth the wait.