Saturday, November 18, 2006

Nerds Gone Wild - PS3

Sony PS3 is here and as expected it brought the nitwits, the bad and the ugly out of the woodwork:

Sony is said to be losing $300 for each PS3 sold:$300-For-Each-Sold-PlayStation-3,-Say-Researchers_2224.html.

But the real losers are the folks who are selling their PS3s on eBay. What looks like a great flip - from Wal Mart shelf to the hands of an anxious eBay buyer - doesn't look so good if you consider the time spent in getting the unit. Think of it this way: Many PS3 sellers on Ebay are claiming to have spent upwards of 60 hours waiting in line at Wal Marts, Targets and Best Buys to have first dibs on the limited inventory item. That's the equivalent of working a week and a half of eight hour shifts. Let's say one of the folks on that line makes $10/hr; 60 hrs on line works out to $600 worth of time camping out in a parking lot (for some of those guys that's probably still better than working for a boss). With final selling prices for the 60gb version of PS3s hovering at $1400 on eBay - the $650 cost for the unit works out to a gross profit of $750. But it's down hill from there. When you factor in $600 worth of time spent waiting to get the PS3, the profit is whittled down to just $150; and don't forget to add in eBay selling fees and Paypal fees to subtract another $78. Net profit ends up being just $72.

This little exercise in the value of time is likely just a waste of time since anyone who would live in a parking lot for 60 hours probably doesn't view their time and effort as being worth much to begin with.

If I spent all that time outside a China Mart... err, Wal Mart, I would enjoy the PS3 and not flip it like it was stock from a hot IPO.

By the way, the numskull (literally) who managed to slam his face into the flagpole in the above video link was probably unaware of a really awesome feature of PS3 that goes beyond the realm of playing games - Blue Ray video disc technology. When played on a 1080p television display, Blue Ray makes conventional DVDs look like muddy, 5th generation VHS. But this blogger has it right concerning Blue Ray... it's a huge gamble that Sony is making:

Amid the hoopla over both PS3 and Sony Pictures' new Bond film, ADRs of Sony nudged 2% higher on Friday. From an investment standpoint, many may end up wondering, "Is that all there is?" The Sony stock chart with its series of lower highs and lower lows looks terrible:

There are no BUY ratings from analysts who cover SNE, 10 HOLDS and a combination of 11 SELLS and STRONG SELLS, acccording to data from the Jaywalk Consenus. The Street basically hates the stock and with major resistance on the chart showing at about $47 and a larger double top near $52 SNE looks like dead money. For Sony's sake, let's hope PS3s don't start bursting into flames like their computer batteries did.

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