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Xbox Sells Out Right Away, But Not Everywhere

16 Nov, 2001 By: Holly J. Wagner

Although hardcore gamers and market speculators gobbled up most of the available Xbox consoles by noon Nov. 15, most stores around the country opened with hardware units available — unlike the PlayStation 2 rush last year.Some mass market stores like Target and Wal-Mart had both hardware and games for customers as late as noon on launch day. An Electronics Boutique in San Francisco still had five Xboxes for sale on store shelves at noon, a store employee reported.

Blockbuster Inc., which is renting both Xbox and GameCube (street Nov. 18) at selected locations, latched onto the hype by offering consumers who purchased new systems a free five-day video game rental. The offer is good from Dec. 1-Jan. 31.Hollywood Video stores also planned to rent new systems and software.

Last year, PlayStation 2 consoles were virtually impossible to come by, especially at specialty video game retailers, which presell hardware as much as a year before launch.

“Last year with PS2, people were getting into fights,” said Dave Schlemmer, general manager at the Best Buy in Costa Mesa, Calif., where Xbox buyers — some of whom camped outside the store overnight — were given numbers in queue and allowed into the store five at a time. “Otherwise we'd have people sneaking in the back doors,” Schlemmer said, noting that line-cutting was the biggest problem with last year's PS2 rush. The store also had all its units under lock and key, with a runner bringing each console to the register as each ticketed customer approached.

Most mass merchants reported early sellouts and most, like Best Buy, would not reveal how many units were available or sold at each store.

“It's a corporate directive, we're not allowed to talk about it,” Schlemmer said.That didn't stop competitor Fry's Electronics in Fountain Valley, Calif., from trying to size up the competition. “We have spies,” quipped software supervisor Rick Gascon. The store sent shill shoppers to competitors to see how well stocked they were. The 43 units in Fry's initial shipment were sold out in 15 minutes, said sales representative Mike Nguyen, but the store was accepting up to 20 preorders for a shipment promised within 30 days.

The Toys “R” Us in Costa Mesa received only 15 units and sold all of them within minutes, a salesperson said. A nearby Target store would not disclose how many units it had at opening, but a salesperson said they were all sold in the morning.

Some Xbox buyers were counting on shortages creating a speculative market.The first nine shoppers in Best Buy's line, a group that camped overnight and bought one unit each, said they would only keep two to play.“They sell for a lot on eBay,” said Daniel Hsu, 19. He and his friends hope to double or triple their money by selling their Xboxes online. “We're doing the same thing with GameCube on Sunday,” he said.

Only one in the group waffled about keeping his console. Denny Chen, 19, bought two games because of a same-day promotional price break and said he was torn about whether to sell his console or play with it.

By 2:30 p.m. Nov. 15, consoles were selling for between $480 and $530 on eBay. The Web site reported that 1,280 Xbox items and 1,245 GameCube items sold between Oct. 8 and Nov. 9. Those figures included software and accessories. Paul Chen, 22, an economics student at the University of California, Irvine, bought his game to play himself but predicted the speculators will get between $500 and $1,000 per console, depending on the depth of hardware shortages.

Chen, like some others, bought the console on the strength of MicroSoft's name and marketing efforts. He also bought the DVD player add-on, which was a popular feature among other shoppers as well. He and Amit Saimani, 20, another lifelong gamer, said the DVD add-on would be their first DVD players. While the DVD playback add-on is a selling point, more buyers cited graphics and processor quality, Xbox game titles and the Microsoft name as draws.

Julie Misner was buying a console for her children (“ages 6, 9 and 39, if you count my husband”) for Christmas and said she chose Xbox “because it's Microsoft.”Game Dude, an independent store in North Hollywood, Calif. popular with hardcore gamers, did not receive the 12 Xbox systems it had purchased, according to president and c.e.o Herb Davis. “We have no idea whether we'll get any at all,” he says.

Adding to the frustration, Davis says, is that his distributor required him to purchase 75 Xbox software units for each hardware unit he purchased. He doesn't expect to sell many of those games by the holidays and thinks he may have to cut the price of the games, which he is selling for an average $44.95, closer to his cost to move them off his shelves. “To get the 12 systems we had to pay $25,000,” Davis says.

“As of noon central time Nov. 15, we were almost all sold through the initial shipments of Xbox and expect those stores that have hardware to sell through by the end of the day,” said a Wal-Mart spokesperson. “PlayStation 2s may have sold out a little bit quicker and there seemed to be a bit more hype surrounding that launch last year. Several of our stores sold out in the first 20 or 30 minutes others sold out in the first few hours. Our 24 hour stores began selling Xbox at 12:01 a.m.”

The Wal-Mart in Santa Ana, Calif., had six units, all sold within first hour of the morning. “We had a raffle a couple of days ago to buy the units, but none of the winners showed up on time so we sold them,” said a clerk.

In terms of software, Microsoft first-party games are dominating sales. Halo, Dead or Alive 3, Oddworld, NFL Fever 2002 and Project Gotham Racing are selling out.

NFL Fever 2002 has been selling much better than Electronic Arts' Madden NFL 2002 because customers are looking for something different,” said Vincent Van Den Hoed, manager at a Concord, Calif., Babbage's store.

Additional reporting by John Gaudiosi, Jessica Wolf, Enrique Rivero and Kurt Indvik.

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