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Wal-Mart $100 Gift Card Boon to PlayStation 3 Sales

9 Jun, 2008 By: Erik Gruenwedel

Wal-Mart Stores Inc.'s weeklong offering of a $100 gift card with the purchase of a Blu-ray player is paying dividends for Sony Corp.'s PlayStation 3 game console with a BD drive.

Wal-Mart stores contacted in Southern California reported selling out of daily allotments of the $399 PS3, while sales of stand-alone BD players, including Magnavox's $298 player, idled.

The $100 gift card promotion, from June 8 to 14, acted as a rebate to consumers eager to experience Blu-ray movies and cutting-edge video games, said retailers.

Wal-Mart also is offering a selection of Blu-ray titles for $15 each, including Flags of Our Fathers, Syriana, The Patriot, A Knight's Tale, The Last Samurai, Training Day, The Fifth Element, Shooter, Blood Diamond, 300, War and 3:10 to Yuma.

Bentonville, Ark.-based Wal-Mart said entertainment, which included standard DVD and Blu-ray, helped boost May same-store domestic sales 4% to $19.5 billion, compared to 0.3% increase and $18 billion in the prior-year period.

The company does not report sales data for separate product categories or items.

Managers and employees of electronics departments contacted at California Wal-Mart locations in Foothill Ranch, Torrance, Norwalk, San Diego, El Cajon, Oceanside, Temecula and San Clemente, all said they had sold out of their daily shipments of four PS3s since the start of the promotion.

“I sold eight yesterday,” said the manager at the Foothill Ranch store.

By comparison, he said the store hadn't sold any of the Magnavox players. He did, however, recommend the Magnavox if the customer just wanted to watch Blu-ray movies.

“The PS3 gets pretty hot after fours hours,” Mohamed said.

An employee at the El Cajon store offered the consumer a Panasonic Blu-ray player for $448.

“We don't have any more PS3 in stock,” she said. “We should be getting some more in tonight.”

The Norwalk manager said there was no shortage of Magnavox units.

“We have lots of those,” she said.

Michael Pachter, media analyst with Wedbush Morgan Securities in Los Angeles, said the PS3 has “at least” $100 of added value over a standard Blu-ray player, a fact he said helped trigger consumer interest.

“People will want BD more when there is more content, but they want consoles now,” Pachter said.

Rob Enderle, independent analyst with The Enderle Group in San Jose, Calif., said the PS3 remains one of the best deals on the market, even without the $100 gift card.

He said the fact that the PS3 can be updated for Profile 2.0 (Web connectivity), whereas the Profile 1.1 Magnavox cannot, motivated informed shoppers.

“I'll bet a lot of people at the stores, and those that read up on their purchases, know this,” Enderle said.

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