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PS3 Supply Woes: Which Console Wins? PS3 Supply Woes: Which Console Wins?
By David Garrett
November 15, 2006 11:20AM

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Sony's PlayStation 3 shortage might be happening at the worst possible time -- the holidays, when gift buying makes competing for hot toys a contact sport. Moms and dads who can't get their hands on a PlayStation 3 -- but need something under the tree on Christmas morning -- might be willing to substitute a Nintendo Wii or a Microsoft Xbox 360.
 



This will be a heck of a week for gamers. On Friday, Sony unleashes the PlayStation 3, the much-awaited console that promises blazingly fast graphics and a slew of high-def games. On Sunday, Nintendo's Wii hits the shelves, setting the stage for a first-class brawl.

A three-way brawl, that is.

Microsoft Relevant Products/Services's Xbox 360 is still in the mix, even though Microsoft released the console last year. To stay in the race, Microsoft announced a slew of improvements to its Xbox 360 Live service Relevant Products/Services two weeks ago, including support for high-definition content and some 80 new features and tweaks.

But there's a glitch in this week's showdown -- and it could be a big one.

Scarce Supply

There's a deep shortage of PlayStation 3 consoles, which begs the question of which company will benefit most -- Microsoft in one corner, Nintendo in the other -- from Sony's lapse.

"If you look at almost all the hot toys, and that leads right up into video games, they all had some element of shortage that got them rolling," said Eric Johnson, professor of operations management at Dartmouth's Tuck School of Business and director of the Glassmeyer/McNamee Center for Digital Strategies.

"But severe shortage," said Johnson, "is a different story. It can work against you, particularly in the short life cycles of these products."

What's more, Sony's shortage comes at the worst possible time -- the holidays, when gift buying makes competing for hot toys a contact sport. Moms and dads who can't get their hands on a PlayStation 3 -- but need something under the tree on Christmas morning -- will be more willing to substitute a Wii or an Xbox 360 than they would in the middle of August.

Fight Club

"The Xbox 360 is pretty close, so I think it probably stands to benefit in some ways the most," said Johnson.

"But the interesting thing this year is that both Wii and Xbox and PlayStation 3 are all sufficiently different -- they're playing to different segments of the market to some extent," he added.

In the end, it's simply not clear whether Microsoft or Nintendo will take the bigger portion of the Sony pie. But this much is clear: It will be a week worth watching. Good fights always are.
 

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