What is the marketing strategy of games consoles?

December 8, 2004 8:14 AM

I don't know anything about business or whatever, so Sony's strategy for the PS2 makes no sense to me. My girlfriend wants to get me a PS2 for Christmas, but every place we've called has basically told us the same thing: everyone's sold out because Sony is shorting store's orders in order to drive up demand. They did pretty much the same thing a few years ago when the PS2 launched. It didn't make any sense to me then, and doesn't make any sense to me now. What kind of business sense does this make? What's the point of driving up demand for a product that they don't supply? Are they trying to set up sales beyond Christmas? But even then, don't they just risk people getting pissed off and something from their competitor?

All that said, anyone know where we can buy one? ;)

posted by emptybowl to computers & internet (15 comments total)

From what I've heard on techie sites, the shortage of PS2s was not intentional, but was due to some difficulties with parts for the new slimmer PSs and unexpected increased demand.
posted by falconred at 8:31 AM on December 8, 2004

I think it is simply that the new mini PS2 was more popular than they expected, and production lags new orders by a surprisingly long time.

Further, I wouldn't believe any store clerk's views of Sony's motives. Their source is probably the internet, just like everyone else.
posted by smackfu at 8:32 AM on December 8, 2004

• Talking about how you can't get a PS2 to your friends works as advertising for them.

• Shorting supply creates the illusion that absolutely everyone wants one and it's the must-get gift of the year.

• It makes the other systems on the shelf look unwanted and therefore less desirable.

• If the shortage becomes batty enough, then it might make the news.
posted by Sticherbeast at 8:37 AM on December 8, 2004

Remember Tickle-Me-Elmo? The 'must have' buzz allows companies to keep prices high through the natural sales life of a product, instead of slashing them after the Christmas/initial rush. It's a lame practice and Nintendo has been accused of doing it for their DS unit this year.
posted by remlapm at 8:39 AM on December 8, 2004

Along with being able to keep prices artificially high, you also get to keep the "coolness" factor artificially high also.

You actually managed to get a [whatever]!?! I can please gawk and awe at it? Thinks: "I've got to get a [whatever] whenever possible!"

It's how the Bzzagent folks get people to work for free. They excitedly think, "I get this new thing before anyone else!" even if the thing is as unexciting as say, horseradish sauce.

(Note: I don't really know what they think and have never had horseradish sauce.)

For a stunning example of this, you can read the first chapter of Jennifer Government. Or, you can just read this entry on the author's site, where he explains that Nike is copying (almost) exactly the limited release method that he wrote in the first chapter.
posted by easyasy3k at 9:38 AM on December 8, 2004

When I went out to get a PSTwo (as the newer, smaller, PS2s are often called) I found that the usual geek outlets like Fry's Electronics were sold out and had little expectation of getting inventory soon. Places like Circuit City and Best Buy not only had available inventory, but were giving away free 3rd party controllers. I ended up getting my PSTwo without a wait. No one else at the store was shopping for playstations, and there were four additional units on the shelf.

It may be that the more established retailers are throwing their weight around and getting better allocations of PSTwo shippments than the "n00b" tech retailers. They know that video games sell well and provide an upsale opportunity for their more expensive video products, so they make a special effort to get the units.

On preview, what smackfu said. Clerks not only don't know what is going on elsewhere, but it is in their interest to convince you that every other shop is in the same situation that they are. If they can trick you into placing an order with them, they've locked in a sale.

Finally, if you don't need the small-form-factor PSTwo, GameStop has a pile of used PS2s.
posted by b1tr0t at 9:42 AM on December 8, 2004

I have an old school PS2 that I've been pondering selling (more interest in my GameCube and DS plus pondering getting an Xbox), so if everything else fails, drop me a line. It's got two controllers, two memory cards, and all three GTAs.
posted by robocop is bleeding at 10:02 AM on December 8, 2004

Either Sony is incredibly stupid, or they're doing this on purpose. I worked in an electronics department when PS2 came out, and their were shortages for the christmas season with the same (not enough parts, shortages, etc.) excuses. Considering that they've "encountered these shortages before." They are either running their business poorly (not doing everything they can to have an adequete number of parts) or they're doing it on purpose. My guess is the later, for reasons mentioned above.
posted by drezdn at 10:09 AM on December 8, 2004

Apparently, Sony has some problems with a cargo ship:

Sony Corp. is using Russian cargo planes to fly the new version of its PlayStation 2 games console to Europe after an accident in the Suez Canal disrupted supplies.
posted by McSly at 10:13 AM on December 8, 2004

Can't you buy one online, from Amazon, Buy.com, J&R, or somesuch?
posted by mkultra at 10:26 AM on December 8, 2004

Consider that you don't always know exactly how many units to produce. You might go over, or under. Which is the worse error? If you over-produce, then you've made a bigger manufacturing outlay, and you wind up driving down the price of your product by glutting the market with it. If you under-produce, then you drive up the price, and commit less resources to manufacturing. Obviously the ideal thing is to get it just exactly right. But can you blame them for erring on the side of shortage? I would.
posted by scarabic at 10:42 AM on December 8, 2004

With toys at least, I've read that companies do it on purpose, because if your kid *wants* the toy, you'll get it for him/her - if you can't get it before xmas, you'll get it after. And, you'll also buy another toy for xmas to "make up for" the fact that he or she didn't get the toy they wanted so bad for xmas.

So the toy companies just managed to sell 2 toys instead of 1. I have no idea if Sony is following this strategy or not...
posted by jasper411 at 3:00 PM on December 8, 2004

It's amazing how many low-level sales clerks are privy to the entire workings of the Sony supply chain. Was this covered in the latest issue of Corporate Secrets Weekly?
posted by mosch at 3:57 PM on December 8, 2004

While Amazon isn't selling them directly, there are a lot for sale through Amazon Marketplace.
posted by modofo at 4:01 PM on December 8, 2004

Just go to a reputable local pawnbroker and buy a secondhand PS2. Cash Converters here in Australia always have a stock of PS2s and they give a guarantee (3 months I think).
posted by krisjohn at 5:30 PM on December 8, 2004