We’ve always been able to see the amazing value packed into the PlayStation 3, so much so, we’ve dedicated countless hours of our lives informing all of you about our favorite high definition console and its software. However, the PS3 had long been a hard sell to many consumers, especially in the first couple years of its lifespan due to the substantial manufacturing costs Sony incurred (at launch, the PS3 cost Sony nearly $900 to produce), resulting in a higher price tag than the competition. All of that changed with the announcement of the 120GB PS3 “Slim” model that was released last September. At a much more affordable price point of $299, average consumers could finally begin to see the value that the PlayStation 3 has to offer. From HD gaming, Blu-Ray movies, and so much more, the PS3 has the best feature offering out of any of the current-gen consoles on the market, in fact, it only does everything.
Ever since the 120GB “Slim” launched, the console has been in extremely high demand, breaking sales records for the PS3 during the last holiday sales season. Toward the end of the holiday season, the PS3 became hard to come by, and since then, the stock supply has all but dried up. Sony themselves are aware of the stock issues, and are currently trying to fill the retail channel to the best of their capabilities. When an item is in such high demand, yet obtaining one is rare due to short supply, the price is usually driven upward. Supply and demand is, according to Wikipedia, an “economic model of price determination in a market. It concludes that in a competitive market, price will function to equalize the quantity demanded by consumers, and the quantity supplied by producers, resulting in an economic equilibrium of price and quantity.” Makes sense right? You want it, it’s hard to get, so you pay more. Simple enough.
So now that the PS3 is in such high demand, yet quantities are low, how has that affected the price? What about sales?
According to last month’s NPD sales figures, the PS3 sold a whopping 180,800 units, just under 5,000 shy of its closest competitor, all while being in scarce supply. The console has been selling similar figures for the past 5 months, despite the console being extremely difficult to find. Imagine how many additional units would have been sold if they were only available for eager consumers to buy them up.
That covers sales, so what about price? This is by no means a perfect example of the overall market, but it is a good example nonetheless. Amazon.com, the world’s largest marketplace, not only sells products, including video games, on their own, they also allow other retailers (such as Target) or distributors to sell the same products Amazon sells for a competitive price. Amazon
Here is where the supply and demand model comes into play. Normal retailers like Amazon
Shocking? Not really, especially considering the PS3’s momentum ever since the price drop and release of the slim model. Shortly after that, some of the PS3’s most anticipated titles were released with God of War III and Final Fantasy XIII, both of which are consider to be “system sellers”. On top of the already robust library, the future for the PS3 is a very bright one, lit by the glowing orb atop the PlayStation Move controller, and the console manufacturer’s very best first-party software offering ever with the likes of Killzone 3, LittleBigPlanet 2, along with many more to be revealed at E3.
The momentum won’t be stopping anytime soon.
