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PlayStation 3 owners ponder payoff over play

Sony Corp.’s PlayStation 3 game console went on sale Friday, and the lucky few who got one were now struggling with some tough questions: Keep it, or sell it for a handsome profit? Play right now, or catch up on sleep lost standing in line?
Sony PlayStation 3
Justin Kwong was the first in line at the Mountain View, Calif., Best Buy when Sony's PlayStation 3 went on sale Friday. Paul Sakuma / AP
/ Source: The Associated Press

Sony Corp.’s PlayStation 3 game console went on sale Friday, and the lucky few who got one were now struggling with some tough questions: Keep it, or sell it for a handsome profit? Play right now, or catch up on sleep lost standing in line?

Retailers, meanwhile, were cleaning up after midnight and morning launch events that ranged from orderly to violent, with one incident of gunfire. At the same time, they were gearing up for the Sunday launch of the next eagerly awaited console, Nintendo Co.’s Wii.

In Los Altos, Calif., Justin Kwong was looking at an unopened PlayStation 3 box and wondering what to do. He bought it Friday morning after three nights in a sleeping bag outside the Mountain View Best Buy.

Kwong, 19, and his sister had planned to get one each: one to sell and one to keep. But she wasn’t able to buy hers because of long lines outside the stores in Los Angeles, where she lives. Kwong was now waiting to get in touch with her to decide what to do with the one he got.

“Me personally, I’ve seen what they’re going for ... so I’m thinking probably of selling, because it’s such a large profit margin,” he said.

The two PS3 models cost $500 and $600 in the stores, but were selling for between $1,000 and $3,000 on eBay on Friday, with most of them toward the higher end of the range.

But many auctions that were posted earlier in the week were withdrawn before they ended, probably because the prospective sellers were not able to obtain one of the 400,000 units available at the launch.

The tight supplies led to rowdiness at several stores, and some shoppers were attacked by muggers. In Putnam, Conn., two gunmen tried to rob people lined up for the console, and shot one who refused to surrender his money. Michael Penkala, 21, of Webster, Mass., was wounded in the chest and shoulder. He was in stable condition Friday with injuries not believed to be life threatening, according to Connecticut State Police.

In Fresno, Calif., police arrested two people and threatened to use Tasers to break up a crowd that rushed a store and trampled people in the parking lot. And outside a Target store in Henrico, Va., police fired a powder ball at the ground to get the attention of an unruly crowd of about 350 people.

Sergio Deynes, 26, who camped out at a Best Buy in New York since Monday, said the people with him at the front of the line were “beautiful.”

“It was the people in the back who were desperate who messed things up for a lot of us,” Deynes said.

His cousin, who camped with Deynes, immediately sold his PS3 for $2,500. Deynes is keeping his, however.

“Hearing all these numbers definitely made me very conflicted,” Deynes said, but “thinking of all that I went through, I’m not getting rid of this thing ... Last night the rain messed up our tents and we got soaked and we had to sleep in the freezing cold.”

Deynes said he had two thoughts in his head: “Man, I could go to sleep, or I could play this for a little bit.”

Taking a loss
Meanwhile, technology research firm iSuppli Corp. reported taking apart a console to analyze its components.

It found that each $600 console costs Sony $840 to make. ISuppli notes that it’s common for manufacturers to take a loss on the hardware, calculating that they’ll make it up with game sales. Also, component costs should come down in the future.

“Still, the size of Sony’s loss per unit is remarkable, even for the video-game console business,” iSuppli said.

The company called the console “an engineering masterpiece,” more akin to expensive corporate hardware than a consumer-level computer.

In Philadelphia, Glenn Giersdorf had his PS3 up and running but didn’t see it as being an immediate step up from Microsoft Corp.’s Xbox 360 console, which went on sale a year ago. He said a new Xbox title, “Gears of War,” actually looked a little bit better than the equivalent PS3 game, “Resistance: Fall of Man.”

This is natural, Giersdorf said, as games that are available for the launch of a console generally aren’t as good as games that come out later, when developers have learned to take advantage of all the features of the hardware.

“By 2008, Sony is going to be showing that the console has more ability and power than the 360,” said Giersdorf, 35.

Giersdorf is also getting a Wii, ostensibly for his 4-year-old son.

“That’s how I’m kind of selling it to his mom,” Giersdorf said.

The launch of the Wii is expected be less dramatic than the PS3 launch, because Nintendo will have about 10 times as many units available as Sony.

Nintendo’s fan base is also smaller. It sold 21 million units of its previous console, the GameCube, compared to 110 million for Sony’s PlayStation 2. But it’s quite possible that the Wii could grab some market share from Sony with its family-friendly games, $250 price tag and innovative motion-sensing controller.

“It’s very, very tempting to a parent,” said Giersdorf. “The graphics don’t look as nice as the PS3 or 360, but the graphics are fine.”