Newsflash: Playstation3 in short supply

TWICE: Dealers Dealing With Limited PS3 Supplies

You know, with a headline that awkward, the editors at TWICE must be flustered and irate. I'm guessing their kids are bugging them for a PS3.

New York – Retailers are as frustrated as their customers over Sony’s slim allocations of PlayStation 3 consoles, and are variously responding with resignation, launch promotions, or disregard.

The latter tack is being taken by Abt Electronics, which is choosing to ignore this Friday’s launch rather than disappoint customers. “We looked into buying truckloads through a distributor,” said president Mike Abt, who ultimately decided to pre-sell his limited allotment in July and pull any mention of PlayStation from ads. “We’re very disappointed in the allocations,” he said. “We’re not taking orders and we’re not talking about it”– an ironic twist, given that Sony’s largest-ever in-store shop will open within Abt’s showroom on the day PS3 debuts.

By contrast, Circuit City, which received about 5 percent of Sony’s initial 400,000-unit shipment or roughly 20,000 consoles according to Lehman Brothers analyst Alan Rifkin, is making the best of a tight situation. The company will hold midnight launch events at six stores in Chicago, Los Angeles, New York, Philadelphia, Richmond, Va., and Washington, D.C., featuring live radio coverage, T-shirt giveaways, and drawings for five free consoles at each location that will be open to the first 100 on line. (The New York store, on Manhattan’s Union Square, will open the drawing up to the first 750 in cue, and will give away 100 units.)

For everyone else it will be first-come, first-served at 8 a.m. on Friday, which Circuit City considers a fairer approach than pre-orders. “We have very limited supplies and won’t have enough for everybody,” said spokesman Jim Babb. To mitigate the pain, Circuit City indicated in circulars that it would have a minimum of 15 consoles per location, and stores will post their actual quantities the night before the launch. Those on line will receive vouchers at 6 a.m., while the rest must await additional shipments from Sony, which Lehman Brothers’ Rifkin pegs at about 600,000 more units for the U.S. market by year’s end.

Allocations are causing some retailers to adjust their PS3 promotions.Best Buy, which is heralding the launch on the first three pages of its circular this week, will also hold midnight openings at select stores Thursday night. Staffers will begin handing out vouchers at 11 p.m., and recipients will have until 1 a.m. to make their purchases. The balance of stores will open at 8 a.m. on Friday, with vouchers to be distributed an hour earlier.

Best Buy indicated a minimum of 20 consoles per store, reflecting an allocation of 15 percent of shipments or 60,000 units according to Rifkin, the most for any retailer he said.

Other dealers will make due with less. Michael Perlman, president/CEO of BrandsMart U.S.A., who will also sell the systems on a first-come, first-served basis, expects to blow through his 600 pieces in minutes. “That’s not a lot of consoles for eight stores,” he said. “But the second round’s not far behind.”

What's interesting is how the allocations quoted in the article go along with the numbers in last night's editorial that I, quite frankly, made up off the top of my head. Wal-mart, of course, isn't talking. However, I would be willing to wager that their share of the PS3 pie is about 25%, plus or minus a point or two.

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