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The Dark Side of the PlayStation 3 Launch 505

An anonymous reader writes "Kotaku is running an article prompted by an email from a foreign student in Japan. The reader unveils the sad reality of the modern gaming industry. Japanese businessmen made ample use of homeless people and Chinese nationals to obtain PS3s for re-sale. There was also a large amount of pushing and shoving, some fights, and almost no police presence at the most crowded stores." From the article: "Based on my observations of the first twenty PS3s sold at Bic Camera, they were all purchased by Chinese nationals, none of whom bought any software. After making their purchase, television crews asked for interviews but all were declined. These temporary owners of PS3s would then make their way down the street where their bosses waited. After several minutes, a dozen PS3s were rounded up, as their Japanese business manager paid out cash to those who waited in line for them. I witnessed a homeless-looking Chinese man, in his sixties or seventies get paid 20,000 yen for his services and was then sent away." Update: 11/12 05:40 GMT by Z : You're right. Sony only shares a portion of the blame here. Offsides on my part.
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The Dark Side of the PlayStation 3 Launch

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  • by Anonymous Coward on Sunday November 12, 2006 @01:28AM (#16811198)
    Why is Sony getting blamed here?

    • by donaldm ( 919619 ) on Sunday November 12, 2006 @02:19AM (#16811572)
      Why is Sony getting blamed here? -- Definitely insightful since it really is a media beat-up.

      In any limited supply launch and it does not have to be a console you are always going to get people who will take advantage of the situation. Normally we call these people "scalpers" and some not so nice names as well, but in reality it is supply and demand. Basically there are people who will pay ridicules prices for something because they are normally too lazy to stand in-line and this is what these people are counting on.

      To blame Sony for this is just plain stupid. If people did not want this machine then it would not sell and we know that is not true. What is actually good for Sony here is the fact that the IMHO "idiot" who will pay well over the market rate will most likely have the money to pay for games which is how Games Manufacturers makes money.

      I think we can call this a "win" (queue sitter US$170), "win" (scalper US$???? - US$170), "win and loose" (the idiot who buys US$????) and "win" (games - approx US$30 to US$60) and "win" (Sony - percentage of games sold).

      Disclaimer. It is my opinion that a person who buys a product way over the its market rate is either very wealthy and an idiot or just a plain idiot. Still without these people scalpers would not exist.
      • by HUADPE ( 903765 ) on Sunday November 12, 2006 @03:12AM (#16811812) Homepage
        Disclaimer. It is my opinion that a person who buys a product way over the its market rate is either very wealthy and an idiot or just a plain idiot. Still without these people scalpers would not exist.

        Not always. They (evidenced by paying $1500+ as other /.ers cited), have very high reservation prices (that is the max price they are willing to pay). If you make the rough equivalent of $500/hour (ask about rates at your local corporate law firm if you don't believe that number), then standing in line for 4 hours would be worth $2000 of opportunity cost to you. Paying $1500 for the scalped version is a savings of about $1100 for this hypothetical person ($2000 opportunity cost + $600 console price) - $1500. Or they could wait for demand to settle down and buy it later, but then there is an opportunity cost of waiting (in lost gaming time / bragging rights), which they price at over $900 ($1500 scalper price - $600 retail price).

        Not saying this applies to most people, just people with insane amounts of either money or utility derived from gaming. Still, it is perfectly possible for a rational person to buy a scalped console, and really have that be the best value for them.

        And yes IAAES (I am an economics student)

    • Honestly, Sony should sell those PS3s at the price people are actually willing to pay, i.e. much more than retail, instead of failing miserably to prevent anarchy. Setting the correct price, from an economics point of view, would be best done by auction. This leads us to the conclusion that Sony should cut out the middlemen by EBaying the first few batches of PS3s themselves.

      Unfortunately it won't happen because Sony would probably be crucified by the media for allowing people to pay as much as they want
  • by davmoo ( 63521 ) on Sunday November 12, 2006 @01:28AM (#16811202)
    Congratulations, Sony. Nicely done.

    The end users who buy from these middlemen are *every bit* as guilty as Sony or the middlemen. If it weren't for these buyers, there would be no market for the middlemen.
    • Re: (Score:2, Insightful)

      by stinerman ( 812158 )
      How dare you question the Gods of the Free Market! There is nothing wrong here as this was a free market transaction and free market transactions are never wrong by definition. </sarcasm>
      • by Longtime_Lurker_Aces ( 1008565 ) on Sunday November 12, 2006 @01:45AM (#16811362)
        Actually... one could quite easily argue that there is nothing wrong here and that this is a perfect example of a free market working.

        Person A is willing to spend X dollars on a system, but not the time waiting in line.
        Person B is willing to spend the time waiting in line to buy a system at Y to sell for X.
        End result: both parties satisfied.

        The only flaw is that Sony should be taking the profit for this instead of letting third parties do it. Imagine if they used an auction-like system (hey, if google ipo can do it) then the people who value the PS3 most get one, and sony keeps all the profits.
        • Re: (Score:3, Interesting)

          by Dr Reducto ( 665121 )
          I thought that would be a good idea, but it would really alienate the fanbase, espescially since it reeks of mafioso tactics, since Sony could artificially retrict the supply to create a higher price.

          I think the best solution would be one like the Gamespot solution of reserving Xbox 360s for extremely expensive (and profitable) bundles. You could filter the people without money, and still provide value other than just the value of having one of the limited amount of consoles.
        • Re: (Score:3, Insightful)

          by krunk4ever ( 856261 )
          The only flaw is that Sony should be taking the profit for this instead of letting third parties do it. Imagine if they used an auction-like system (hey, if google ipo can do it) then the people who value the PS3 most get one, and sony keeps all the profits.

          I always thought it would be smart and nice for items with high demand on launch and not enough supply to do something like what you suggested. Auction the items off to the highest bidders. However, only take a cut of what the retail price will be and do
    • Waitasec (Score:5, Insightful)

      by Daniel Phillips ( 238627 ) on Sunday November 12, 2006 @04:52AM (#16812168)
      The end users who buy from these middlemen are *every bit* as guilty as Sony or the middlemen.

      Which is to say, guilty of exactly nothing. Guilty of giving a little bit of paying work to homeless people. Anybody thought to ask the homeless people what they thought of the deal? No that would make too much sense.

      What a stupid troll article, the only interesting thing is how many responders took the bait uncritically.
  • by Wavicle ( 181176 ) on Sunday November 12, 2006 @01:29AM (#16811216)
    Congratulations, Sony. Nicely done.

    Heaven forbid we blame the scalpers... or the people willing to buy a PS3 at a premium from the scalpers. Why would we do that when there is a giant corporation we can blame for the ills of society? Damn that holiday season, we are helpless against the dynamic duo: Christmas and Sony. Won't somebody think of the children (especially those who will be deprived of a PS3 this christmas?)
    • Why blame anybody? Is this food or another necessity that we are talking about? Will people die to the lack of PS3s?

      Seriously, I want to laugh at the jackasses who don't have the patience to wait 2 months (mid to end January) to get one at a reasonable price or perhaps even better, at the "scalpers" who will overestimate demand and be left hanging.

      If the "scalpers" make money, more power to them, I really don't care that much. The PS3 isn't like a concert, it'll be back again soon enough and everybody ca
  • Problem? (Score:5, Insightful)

    by insecuritiez ( 606865 ) on Sunday November 12, 2006 @01:30AM (#16811222)
    I don't see much of a problem here. The people who purchased had the money, theirs or not they should get the product. If I can afford dozens of PS3s and can afford to pay dozens of bums to stand in line and buy them, then I'll get dozens of PS3s. How can their be a law against that in a country that regards itself as free (Japan)?
    • I agree. What is the problem with this?

      Let's take a look at entities involved:
      A - Sony and the stores who want to sell the PS3 at RRP.
      B - Homeless people who need money and buy the PS3 at RRP only to sell it again for more.
      C - Fat kid who can't wait a couple more weeks for the PS3 and as such is willing to pay more for it.

      "Scalping" is just another word for "wahhh... I didn't get a cheap one on launch day!"
    • by skam240 ( 789197 )
      bump parent

      there really is no promblem here.
  • by JeanBaptiste ( 537955 ) on Sunday November 12, 2006 @01:31AM (#16811228)
    I fail to see how Sony is in any way responsible.
  • by daybot ( 911557 ) *
    Curse those pesky blue lasers and the factories that fail to produce them quick enough...
  • by codefrog ( 302314 ) on Sunday November 12, 2006 @01:32AM (#16811240)
    There's not really any practical way of preventing scalping is there?
    - float the price high enough to stifle demand (almost there already!)
    - somehow make a PS3 un-transferrable (can you imagine the screams?)
    - magically come up with more PS3s
    - wait until the factories are running full-bore before starting to release any PS3s

    Now, concert and sport ticket scalping is another story, but not I think relevant here.

    Anyhow IMO blaming Sony for this -- or even really considering it to be a problem -- is pretty mistaken.
    Some homeless guys don't get to play with their new PS3s... I'm crying my little heart out here.
    • Two things:

      1. Floating the price higher to reduce demand is an effective way to prevent "scalping". If it's not working, the price just hasn't been raised enough. Didn't we learn anything in high school? If supply can't meet demand, raise the price until it does!

      2. What's so bad about "scalping", anyway?
      • Re: (Score:3, Interesting)

        by dangitman ( 862676 )
        1. Floating the price higher to reduce demand is an effective way to prevent "scalping". If it's not working, the price just hasn't been raised enough.

        That would most likely backfire. If you raised the price enough to match what the early adopters (a very small market) will pay - it would totally kill the buzz, and turn the majority of the market off your product - even if you lowered prices later. End result, raising the price, even if only temporarily, results in less profit. Worst case, your company's n

  • by dannycim ( 442761 ) on Sunday November 12, 2006 @01:32AM (#16811244)
    Congratulations, Sony. Nicely done.

    Ok, so Sony makes a product, a lot of people want it, some resort to unscrupulous tactics to get them, and somehow that's Sony's fault?

    All this Sony bashing is getting ri-goddamned-diculous.
  • 20,000 yen (Score:4, Informative)

    by morcheeba ( 260908 ) on Sunday November 12, 2006 @01:32AM (#16811248) Journal
    is about $170
  • You know, so you don't have huge crowds like this? Charge a premium to those that want to pick it up the day it's released. No wonder Sony is loosing so much money. If there is that much demand for their product, why aren't they charging more?
    • by Shados ( 741919 )
      Because even as it is, the price of the PS3 is 80% of the reason its reputation went to hell. Sony sucks, but it doesn't suck that bad. The PS3 doesn't look so good, but it doesn't look that horrible. The Wii looks great, but it doesn't look -that- great (these are all relatively speaking, I'm losing sleep at the thought of a Wii!).

      But the pricing of the PS3 made everyone flip out. Can you imagine if they had charged more? They might as well sellout rather than do that. It sucks, but thats the way market
    • by Rix ( 54095 )
      Because they get millions in free advertisement from morons standing in line.
  • What? (Score:5, Insightful)

    by RyoShin ( 610051 ) <tukaro AT gmail DOT com> on Sunday November 12, 2006 @01:36AM (#16811292) Homepage Journal
    Congratulations, Sony. Nicely done.
    Yes, because Sony told people to utilize homeless people and push and shove to get a PS3.

    Don't get me wrong, Sony has done a lot of bad shit, and has been very arrogant when it comes to the PS3, but this kind of behavior should be attributed expressly to the consumers. Okay, one might argue that Sony created an artificial shortage (blue laser conspiracy?), but that's no reason someone has to be an asshole. It isn't a necessary product, so the fault lies almost entirely on the consumers.

    Come on, Zonk. I'm pretty anti-Sony, too, but you don't need to redirect blame for something like this. There's lots of other stuff Sony has done to be called on.
  • by Lurker2288 ( 995635 ) on Sunday November 12, 2006 @01:39AM (#16811316)
    It's amusing to me that folks have no problem with somebody dropping hundreds of dollars on a console, but hiring homeless people to scalp them is some huge crime. Obviously the homeless guys felt taking some money to wait in a line was a better use of their time than whatever else they'd normally do--they made out here. As for the people who hired them, well...would you expect Steve Jobs to mow his own lawn? Why should he, if he can afford to pay someone else to do it. And as for Sony, like any company, they respond to incentives: in this case, fewer units = more demand. If you don't like it, change their incentives by not buying their shit.
  • First of all, I should note that I agree that it's you can't really blame Sony entirely for this. It's not as if they hired the homeless themselves.

    That said, it's funny to see the same fanbois that criticized MS for all of the issues surrounding the 360 launch (fights, eBay profiteering, etc.), run to Sony's defense when it happens to their console launch.

    You can blame both companies for just not making enough supply to meet demand, which then causes hysteria and the problems we're seeing with the PS3 laun
    • by Rosyna ( 80334 )
      That said, it's funny to see the same fanbois that criticized MS for all of the issues surrounding the 360 launch (fights, eBay profiteering, etc.), run to Sony's defense when it happens to their console launch.

      Since we're talking about the japan launch here, I cannot agree with you. The Xbox 360 basically failed in Japan and was readily available in Japan on launch day. Hell, even many days later, the Xbox 360 was easy to find in Japan (even at the launch store, Tsutaya in Shibuya).
      • by jchenx ( 267053 )
        Well, I was actually referring to the US launch. There were similar issues, with lots of people lining up only to sell the 360 on eBay. I recall there was one incident where someone's console was stolen from them, right after getting it as well. Crazy demand can bring out the worst in people.

        We'll see how the PS3 launch fares in a few days. (I'm pretty certain the Wii launch will be a non-event, since there are far more consoles available)
    • by DrEldarion ( 114072 ) <[moc.liamg] [ta] [0791uhcsm]> on Sunday November 12, 2006 @04:53AM (#16812170)
      That said, it's funny to see the same fanbois that criticized MS for all of the issues surrounding the 360 launch (fights, eBay profiteering, etc.), run to Sony's defense when it happens to their console launch.

      Fanboys? How about people who just think that it's absolutely ridiculous and nonsensical to blame the company? It wasn't Microsoft's fault, it's not Sony's fault, and it won't be Nintendo's fault at the Wii launch.

      You can blame both companies for just not making enough supply to meet demand

      Er, no, you can't blame the companies. They are/were pumping them out as quickly as they can/could. The blame here (if there is any in the first place) lies solely with the people doing it. Honestly, what are the companies supposed to do? Only begin to sell them once they have enough for EVERYONE IN THE WORLD who wants one to buy one?
  • Blame for what? (Score:3, Insightful)

    by QuantumG ( 50515 ) <qg@biodome.org> on Sunday November 12, 2006 @01:45AM (#16811368) Homepage Journal
    People making profit from a high demand for a low supply of items? Shock!
  • http://offer.ebay.com/ws/eBayISAPI.dll?ViewBids& item=330047524577

    I say everyone on that list should be SHOT.

  • How is this any different than you or me buying a PS3 and selling it on eBay? Only difference I can see is, homeless people need the money worse than we do.
  • 20,000 yen is not a bad sum, about $170. Though that probably doesn't go far in Tokyo, it's not to shabby for other parts of Japan.
  • by Rakishi ( 759894 ) on Sunday November 12, 2006 @01:53AM (#16811420)
    If your self control is so nonexistent or your kid so spoiled (and you so whipped by them in turn) that you can't wait another month then it's your damn fault and no one else's. No one is making people buy these on ebay or making them buy them on release day. Hell, at least the scalpers and ebayers are showing intelligence and initialize so good for them.
  • by Anonymous Coward on Sunday November 12, 2006 @01:57AM (#16811446)
    Slashdot has just jumped the shark.
  • Bollocks. The PS3 is not a critical or essential item (irrespective of what you might feel) and theres nothing illegal about scalping it. Its bloody unfair for most people but unfair is not the same as illegal.

    Sure its going to make the PS3 a whole lot harder to get for christmas but if you wanted one that bad there was nothing to stop you from waiting in line for a week.

    The homeless people and chinese nationals made a bit from it for essentially standing in line - how is that a bad thing?

    This is simply the
  • In a free market, if supply is much lower than demand, price should go up until demand is slightly below supply, at least if you are the one doing the selling. I mean really, if Joe is willing to buy my product for $100 and Bill is willing to give me $120 for it, what price should I set for it?

    I don't see why sony doesn't jack up the price... say a 50% increase. They could still clear 100% of their inventory. Unless there are some very good business reasons for having a very rapid initial release.

    And lo
    • by MeanMF ( 631837 )
      20,000 Yen is around US$175.
    • by mh101 ( 620659 )

      What stumps me is how these buyers are managing the homeless. You have to give a bum a wad of cash and watch him walk into the store and out of sight with it? There has to be some serious risk involved for the buyers. But I suppose they are thoroughly threatened before they are given the cash. Or they are escorted.


      One elderly Chinese man, next in line to buy a PS3, was in a state of panic. He explained to a Bic Camera employee that his "friend" has his money, but that he is further back in the line.

    • by Rix ( 54095 )
      There are. They get a massive amount of free advertisement from the artificial "shortage".
  • by QuantumG ( 50515 ) <qg@biodome.org> on Sunday November 12, 2006 @02:01AM (#16811474) Homepage Journal
    These Japanese businessmen should be ashamed!
  • by Al Dimond ( 792444 ) on Sunday November 12, 2006 @02:09AM (#16811518) Journal
    I don't see anything necessarily wrong with this in principle; the consoles are a commodity that is sold for less than it's worth, people can and do buy 'em and sell 'em for a profit. And anyone that desperately wants the console to play games will shell out the dough, because they're suckers. And people that can't afford that are probably better off anyway, because they shouldn't need overpriced crap to make them happy. Mod me redundant, because I'm sure I'm repeating myself here.

    What surprises me is that businessmen are getting into it. Even though they can probably quickly double or triple their investment selling the PS3s, there's a limited supply and lots of competition to get the units. Even if they make $1000 per unit they're spending a considerable amount of time to turn over a limited number of units. It seems to me they could make more money in the same amount of time trading stocks/bonds/commodities because the process is more streamlined and the volumes are higher. So for some kid looking for quick money it would surely be a good investment, I'm just surprised that it's worth the time of rich dudes.
    • by donaldm ( 919619 )
      I suppose a "scalper" can be assumed to be a "businessman" if they are well dressed.

      The people who will buy these over-priced PS3 are IMHO "idiots" and they will find out they are "suckers" if they buy one and it has a problem because these machines won't have a warranty. However it is not illegal unless you don't pay your taxes on any profit you make, still the overall profit would not be that much.
  • This is just like concert tickets. Bands won't charge the market price for a ticket. If they did, many hard core fans couldn't afford the tickets. The problem? While some fans will stand in line "for the passion", the difference between the sale price and the marke price creates an opportunity for profiteers.

    The Band promoters, like Sony, are actually trying to do a GOOD THING by pricing their tickets below what they know the market will bear.

    Alternatives? Sony prices the boxes at twice the fair pr

    • by Rix ( 54095 )
      There already is a special program for people with more money. It's called ebay. Straight out charging more at release would be fairer to more people, as only the unemployed have the time to stand in the lines.

      But that wouldn't generate millions of dollars in free advertising for Sony, which is the real purpose of the "shortages".
    • by QuantumG ( 50515 )
      Sony prices the boxes at twice the fair price for the first two weeks of the release.

      Yes, that's EXACTLY what they should do.
  • I live in Japan and saw nothing like what is being discussed. Sure there might have been one or two isolated incidents, but this sounds like a guy trying to overblow the story way bigger than it was. It's interesting how Slashdot seems to have taken the line of reporting a single guy's observation as fact without questioning it.
  • by bunions ( 970377 ) on Sunday November 12, 2006 @02:24AM (#16811606)
    "Update: 11/12 05:40 GMT by Z : You're right. Sony only shares a portion of the blame here. Offsides on my part."

    Oh, they only share a portion of the blame? That's awfully magnanimous of you, but just exactly why should they take any blame? What should they have done? NOT sold a PS3 to someone because they looked shabby? Should they have insisted on some sort of contract that the customer signs that promises to not resell it?

    This is just shameful. Honestly, did Zonk's mom used to beat him with a playstation or something? The constant Sony-bashing is just insane. And it's not like you have to look real far to find something they actually DID that was wrong.
    • by giblfiz ( 125533 )
      Well, actually what they should have done is sold the first wave of consoles by auction themselves. That way they pick up some extra cash and all this shady BS is cut out of the deal.
  • Next time, it would be a better idea to presale it.

    Sony could have had an online auction in which people could pre-buy it. It wouldn't come out until it comes out, but the people pre-buying it would proceed to pick it up at a store they would have chose when they won the auction.

    This eliminates people buying it only for reaping a huge profit of reselling it. This eliminates the need to wait in line outside a store to be the first to get it. This gives Sony more profit, and can benefit the stores by still gi
  • Just sayin...:)

    p.s. yeah, I trolled. I just start to wonder isn't that constant Sony bashing on /. doesn't come out from Microsoft astrosufers. Seeing slashdotter's sentiment about Sony evil side, it is far too easy.
    p.s.s. consoles are dangerous, they are making you jealous and fanboyant, and all that stuff :)
  • Nice (Score:5, Insightful)

    by MaestroSartori ( 146297 ) on Sunday November 12, 2006 @05:01AM (#16812196) Homepage
    I work for Sony, but this post is all mine and nothing to do with them.

    Sony have taken a lot of flak lately, and it's probably been mostly justified. This, however, is the shittiest smear-job I've ever had the misfortune to read on this site. I won't be returning to the site after this post, at least once this story has run its course (so if there's any replies to this I'll answer)

    How in the name of Zeus's butthole does Sony bear any responsibility whatsoever for the actions of people who aren't Sony employees? Did Sony direct these people to hire the homeless? Did Sony force anyone into doing anything, in any way? If a guy kills another guy so he can steal his PS3, will it be Sony's fault for making it? Of course not, all of these suggestions are absurd. So why attempt to shoehorn Sony into this, trying to heap more hate and blame on a company which already has so much you can fairly criticize it for?

    Criticize us about rootkits, about batteries, about E3 presentations or too much hype, about perceived arrogance or copying Nintendo or making PS3 too expensive or not having enough of them, or about the quality of our hardware or software. You don't even have to make it constructive criticism, if you don't want to. But please, for the love of whatever, criticize us for those things we're at least partly responsible for! The actions of completely unrelated third parties aren't our bloody fault!

    Anyway, enough from me. I've had a /. account for many years longer than I've worked for Sony, but this story has prompted me to leave the site. It's just a little bit too much unreasoning, undirected hatred directed at me from people supposedly smart enough to know better.
    • by Fross ( 83754 )
      They decided to go to launch with an insanely popular device - this popularity mostly of their own devising, see endless hype over the last months/years - with a woefully small number of units.

      So that they can get the "PS3s sell out in 2 hours" headlines.
      So they get press coverage like this about people auctioning them.
      So the PS3 pricetag doesn't look so bad compared to the $1000 or more it sells for on Ebay. Hell, it's "only" $500, must be a good deal, right? :)

      I fully accept they may have had shortages o
  • by TorKlingberg ( 599697 ) on Sunday November 12, 2006 @06:07AM (#16812422)
    As every other post seems to defend Sony here, I have to object.

    Just like Microsoft did with the 360, Sony is releasing a very small amount of consoles at a price far below the market value. Sony isn't making money now. The reason is to make the PS3 seems desirable and popular for when they release the big batch just before the hollidays. Sony _wants_ headlines about PS3s selling out quickly. And what better way to get media attention than violence?

    No, I'm not saying that this is all Sony's fault, or that they are juridically responsible. But I think it is a problem when companies plan for and profit from violence at product releases.

In the realm of scientific observation, luck is granted only to those who are prepared. - Louis Pasteur