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The art of Xbox 360 price gouging
The US last night survived the launch of the Xbox 360. A happy few were able to buy a premium system for $400, the unlucky got stuck with a core system that lacks a hard drive and therefore won't be able to play any of the first generation Xbox games (but you can always upgrade)
Soon after the launch the laws of supply and demand kicked in. The record: one system sold on Ebay for $10,400.
If you hope to copy this healthy 2500 per cent profit margin when the Xbox launches in Europe next week or Asia the week thereafter, pay attention. Below are some observations based on looking at that prices that people paid for new Xbox systems on Ebay.
- Promise the fastest shipping possible: the $10,400 auction promised to ship the unit overnight on Tuesday, allowing the buyer to touch it on Wednesday. Others told prospective buyers to wait up to a week.
- Carefully time when your auction ends. You aren't dealing with your price conscious regular Ebay crowd here. These are impulse buyers. You want to catch them when they are the most desperate:
- Buyers on average paid the most in auctions that had ended before noon. Most systems that sold for around $3,000 actually went under the hammer by 11 am in New York (8 am in San Francisco).
- By 5 pm San Francisco time the average price had dropped to about $800.
- Later in the evening the seemed to pick up again: this one sold for $1325 at 6:30 pm (SF time)
- Learn to spell! Few people will find your Xobx.
- People don't care much about the core systems: this premium system sold for $1025. Only 8 minutes earlier a Core version sold for only $649
- Do you know for sure that you'll get an Xbox? SELL IT! If you're really desperate to own one, sell yours in the morning and buy one in the afternoon after prices have levelled off.
- If you're in for a gamble, follow the above rule even if an Xbox hasn't been allocated to you.
- Don't get greedy: this unit never sold, probably because of a $2,000 reserve price. Ebayers like to bid on items that others already bid for. And low prices get you your first bidders.
- All these rules would also apply if you're looking to buy, in which case I'd like to urge you to take a deep breath and spend a few bucks on a new game for your existing Xbox that will get you through the Holidays. You'll save a truckload of money by waiting. Just donate the savings to charity to further enhance the Holiday spirit.
Tags: Xbox 360, microsoft, ebay
November 23, 2005 at 02:46 AM | Permalink
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Comments
uhg, people who buy an Xbox360 before the others (Revolution, PS3) are people who are oblivious to the others. They're the people who will miss out on true next gen gameing. Real hardcore gamers know that.
Posted-by: NPC | 23 Nov 2005 05:07:15
damn rich people payign 10,000 for a xbox when that weed wears off there in for a big surprise
Posted-by: dan | 23 Nov 2005 05:33:21
NPC...most people who pay this much for the xbox, will most likely buy all three systems.
Posted-by: RPG | 23 Nov 2005 16:40:18
Take a look at that $10k Xbox 360 sale - looks like the person who ran up the bid from $2k and the purchaser are bogus... new Ebayers who never bought anything else!
Posted-by: cornerdude | 23 Nov 2005 17:08:14
Just because they are new Ebayers doesn't mean that their bids by definition are bogus. It might just be a formality to some, but when signing up on Ebay, you sign the terms and conditions, agreeing that you engage in a legally binding contract when bidding on an item. I know that not everybody actually honors the agreement, but just assuming that any "zero history" bidder is a faker doesn't build you much of a case.
Posted-by: SV Sleuth | 23 Nov 2005 17:30:49
I'm sure a rich person hasn't had much need for an account prior to now, as he/she can just go buy things instead of trying to find them on Ebay for cheep. Makes sense that they'd be a first time buyer...
Posted-by: Nick Brown | 23 Nov 2005 19:45:54
This is probably the purest essence of greed that has ever been displayed by any corporation anywhere, anytime. It sets new standards for price gouging for the entire world. It is personally disgusting to me to see this happen. When will Bill Gates have enough money? Even the Universe has limitations. Evidently Microsoft has no limitations when it comes to the basic immorality of EXTREME GREED. They set up the official launch to create a feeding frenzy among normal people and it worked exactly as they had planned it.
God don't like greedy.
Dale J. Martiny
dmartiny@cox.net
Posted-by: Dale J. Martiny | 24 Nov 2005 18:49:22
You that think the zero feedback buyers are legit are very naive and obviously arent sellers selling 360s. To put it plainly, You know not of which you speak.
MANY 360 sellers including myself have been burned repeatedly by people opening up new accounts just to sabatoge 360 sales. ebay has cancelled most of them but theyre still out there. If you or any of the press reporting those high ass sale prices had REALLY been paying attention, youd have noticed that the ones that sold for thousands were won by the SAME GROUP OF ZERO FEEDBACK USERNAMES!! Over and over until they were caught and deregistered as users. I have a list of the FAKE usernames right here on my desk! I by no means consider it a complete list, but the damage is done nonetheless. Many sellers lost out on the 800 to 1200 they would have gotten and had to relist, the average selling price the next day was around 600. Dont be so naive to think that a zero feedback bidder is some rich person with 2,000+ to spend on an xbox. A rich person would most likely already have an account, you know why? Rich people like bargains just as much as any of you! HOW DO YOU THINK MOST OF THEM BECAME RICH IN THE FIRST PLACE? By being HELLA smart with their damn money, thats how. While your shopping for games and such, they shop for minks, collectible cars, rolexs, real estate etc. Trust me, they have real accounts. Saving money is saving money, whether one saves 100.00 on an ipod or a hundred thousand on a big yacht.
Posted-by: David Erivez | 25 Nov 2005 18:40:38
Yet another example of over eager media not fact checking and basicly not having a CLUE what theyre talking about(yes this does count as the media)
None of those high bids were real. If you dont believe me, ask the sellers under 'ask a question' and theyl tell you themselves. The usernames sometimes gave them away. buttmunch, xbox360licksballs, etc. How about the negative one feedback bidder on one of the links with 4 NEGS and no positives? Did the writer of this story even bother to read the bidders list on these auctions? 'Insider' my ass.
I guess 'common sense' isnt so common after all.
Posted-by: chip | 26 Nov 2005 08:16:55
Can you ban ebayers with no feedback from bidding on your auction?
Posted-by: John | 19 Dec 2005 05:15:55
I HIGHLY doubt that the person who won that $10k ebox actually PAID for it. I'd rather have a solid BIN sale for $3k, than a non-paying bidder for $10k. This goes for most of the units that sold for overinflated prices (like beyond $2k-$3k.)
Posted-by: John | 8 Nov 2006 16:35:21
Spanish
