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November 24, 2005
Xbox 360 Trip Report
You know you've gone insane when you see somebody in a tent in front of Target at 1 a.m. and you think to yourself “I wish I had thought of that.” Yes that's right, I waited in line for the X-Box 360. Good thing I'm engaged because if I wasn't that would have killed any hope of it.
The waiting line wasn't bad at all actually. The night before I had gone down to Best Buy to see what the situation was. They said they would have some consoles in but didn't know how many. This was at 8 p.m. and when I left there were somewhere north of 20 people already in line. Getting one didn't mean anywhere near that much to me (I don't spend 12 hours per year outdoors if I can help it, let alone in one evening) so I moseyed on down to Wal-Mart. They had 14 boxes coming in but the line was already near filling so I was starting to give up hope. Then as a last resort I went to Target.
The situation there was promising. They were going to have 48 consoles and I didn't see anyone in line yet. That didn't really surprise me, I wouldn't have thought of Target either except that back when the PS2 was hard to get I had a friend who worked there and would tip us off to their arrival so we could purchase them and flip them on eBay.
The weather was still pretty fair and was supposed to hold all night with nothing more than light drizzle. I decided to go home for a few hours and ended up not going back until 1:30 am. At that time there were 27 people already in line, so I was going to be stuck with a core system, which really sucked. The premium system comes with a hard drive (necessary for playing original Xbox games), a wireless controller (rather than the wired one included with the core), the Xbox Live Headset, and a component HD AV cable, which also functions as a standard def composite video for the less fortunate. The good news is all of that stuff is for sale seperately and ended up costing me $200, money well spent to not have to stand in line all night in 40 degree weather.
Since I was safe as long as 20 people didn't show up I decided to sit in my car for a bit and read. After maybe an hour of that nobody had yet arrived to stand in line behind me so I decided to just leave and come back later. I went to Sheetz, got some food and a gingerbread latte, then went home for a while. I ended up getting back some time close to 5 and 3 people had arrived, pushing me back to 31st in line. Not bad at all. Again I hung out for a bit and then jumped in line at around 5:30. They came out at 6 and passed out tickets. I actually need not have waited at all, but who would have known.
When we got in the store at 8 things went smoothly. At one point in the night some stoned hippie had offered me his ticket, which was for a premium system, in exchange $100 and a core ticket. I gladly told him I would do it but at some point in the evening he ended up making the same deal with someone else, probably because he thought I had left. When I ran into him inside he then sold that core ticket to me for $100.
So I ended up with 2 of the core system. I'm planning to sell the second on eBay. Maximizing profit is going to be tricky but a worthwhile experiment. A bunch of people put them up for sale before they actually laid hands on them, glutting the market with auctions, a significant number of which were later cancelled when the owner couldn't get a console, and driving down prices. Early systems were selling for as low as $100 over list, though I'd guess that somewhere above 75% of them were never delivered.
My initial plan was to wait for that to play out, let reviews come in, hope they were overwhelmingly positive (which I think they will be, cnet gave them an 8.4 and they are very tough critics) and let all of the initial eBayers sell their consoles. Demand should stay steady I thought, maybe even increase as the holidays approach while supplies remain scarce.
All that changed in the afternoon though. The number of listings dropped and the at-work crowd seemed to start a bidding frenzy. At one point in the afternoon units were going for $1200 for a premium, $1k for a core. I decided to list immediately with a $1k reserve, $1,500 buy-it-now, and $600 opening price. I didn't want to list with a low opening price since a token bid would ruin the buy-it-now. I was hoping that the lure of overnight shipping would draw in a hasty buyer.
It didn't work. Unfortunately you can't make an auction run for only a few hours and anything that has an ending time more than 20 minutes in the future is buried multiple pages deep and unfound by buyers. Throughout the night I watched as people bought core systems for more and more, eventually peaking out near $2k I'm told, but by morning they were back down to $600 and I was out $40 in listing fees, some of which I think will pay for my relisting.
Now I'm going to go back to the original plan. I'm thinking of putting it up as a 10 day auction starting Thursday at midnight. That will make it end Sunday at midnight, which I've read is the best time and found from experience to be true. I'm hoping my supply/demand theory turns out to be correct, especially since I have a mole inside Best Buy who is checking the computer system every morning to tell me if any area stores got a shipment of them in. Even if I can just keep flipping them for $300 profit at a time I can make a lot of money that way, since I can probably snag large quantities of them. If prices are high enough I may try to bribe employees from every retail outlet that might get them.
Up next, why Microsoft lost a lot of money on the Xbox 360 launch and my initial reviews.
Posted by themaroon at November 24, 2005 1:28 AM
Comments
don't you make enough money from poker and rakeback to not spend time extorting people who end up fucked over by microsoft?
if you want to wait in line all night to make a couple k thats one thing, to go out of your way to get additional systems just for profit....thats beneath you
i do look forward to the post on why microsoft lost money on this since i'm sure you have detailed cost benefit analysis on them shipping what they did now and by christmas or 3x etc more and how that affects profits for the year
Posted by: gaamblor at November 25, 2005 4:13 AM
I won an Xbox 360 in the pokerstars blogger thingy, but it hasn't arrived yet. When it does, I'm hoping to sell it on Ebay for more than $1K.
Posted by: matt k at November 25, 2005 6:08 AM
Hey gaamblor, its capitalism at its best!! If you do not like it there are plenty of communist countris out there!
Jon
Posted by: Jon at November 25, 2005 9:42 PM