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Microsoft Schooled By EBayers?

Jason Lee Miller
Staff Writer
Published: 2005-11-25

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Ah, the holidays. There's nothing like that pesky giving and charitable spirit being kept in check by greed, violence, and opportunism. Have the Xbox 360 muggings, price gouging, and all around hysteria taught Microsoft a valuable lesson in pricing? Maybe, but as bids on eBay reach $5,000 for the new $400 console, Microsoft has taught everyone a lesson about timing.

Microsoft learned a sore lesson in timing during the last great console push. The original Xbox game console arrived too late. Sony managed to get their mega-popular PlayStation 2 on the market before Christmas and Xbox never caught up.

Not about to make the same mistake twice, the so-called "Beast of Redmond" was sure to:

1. Hype the new console three quarters in advance where the right demographics would receive the message.
2. Release the thing in time for Christmas.
3. Beat Sony's monstrously high-tech PlayStation 3 to the market by months, rather than days or weeks.

So far, that strategy has worked for Microsoft.

In North Dakota, a 17-year-old boy, being one of the first to purchase the console at 12:01 AM Tuesday, found himself Xbox-less one minute later as two assailants punched him in the face and ran off with the goods.

An Electronics Boutique in Stafford, Virgina was robbed at gunpoint by a thief who made off with two of the consoles. He was arrested shortly after.

The console is sold out everywhere as Microsoft, who ramped up production ahead of schedule, only had a limited supply for their simultaneous worldwide launch.

Sellers on eBay have wasted precious little time taking advantage of the shortage. Scroll down this page of Xbox 360 listings and you'll see "Buy It Now" options for over $3000. One report has bids flying as high as $5000.

If it's that in demand, you might say Microsoft missed the boat on holiday pricing. But the more important concept was achieved: beat and under-cut Sony, who's PS3 pricing is unknown, but expected to be between $400 and $500.

In all honesty, this was Microsoft's only real winning strategy. The Xbox 360 is lower tech with graphics that can't touch PS3-the real gamers know that. But kids at Christmas not only don't know that, but don't care, they just have to have one because they have to have one.

Is the Xbox 360 really worth five grand? Well, obviously it's worth as much as someone is willing to pay for it, but the more patient and prudent will wait for the PS3, if you feel you can trust Sony anymore.

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About the Author:
Jason L. Miller is a staff writer for WebProNews covering technology and business.

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