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PS3 Shortage Riles Dealers

11/20/2006 02:00:00 AM Eastern

Retailers were as frustrated as their customers over Sony's slim allocations of PlayStation 3 consoles and variously responded last week with resignation, launch promotions, or disregard.

The latter tack was taken by Abt Electronics, which chose to ignore the 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 last week. "We're not taking orders and we're not talking about it"– an ironic twist, given that Sony's largest-ever in-store shop opened within Abt's showroom on the day of PS3's debut.

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

For everyone else it was first-come, first-served at 8 a.m. last Friday, which Circuit City considered a fairer approach than pre-orders. "We have very limited supplies and won't have enough for everybody," spokesman Jim Babb said last week. To mitigate the pain, Circuit City indicated in circulars that it would have a minimum of 15 consoles per location, and stores posted their actual quantities the night before the launch. Those on line received vouchers at 6 a.m., while the rest must await several more expected shipments from Sony between now and Christmas, Babb said.

Best Buy heralded the launch on the first three pages of its circular last week, hosted a celebrity gaming event in Los Angeles and held midnight openings at 18 stores, where staffers handed out vouchers at 11 p.m. and recipients had until 1 a.m. to make their purchases. The balance of stores opened at 8 a.m. on Friday, with vouchers distributed an hour earlier. "It's an event for these customers," a spokesperson said.

Best Buy promised a minimum of 26 consoles per store (20 60GB consoles and six 20GB units), reflecting an allocation of 15 percent of shipments or 60,000 units, the most for any retailer Rifkin said.

Other dealers made due with less. Michael Perlman, president/CEO of BrandsMart U.S.A., who also sold the systems on a first-come, first-served basis, expected 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."