Holiday Craze

  With Halloween behind us and the holidays looming, cash registers are lying in wait with eager anticipation to officially ring in the holiday shopping season.  But this year, the traditional Black Friday—the Friday after Thankgsgiving—will come a week earlier for some.

  On November 17, Sony will release their latest gaming console, the PlayStation 3.  This time last year it was the Xbox 360 that had gamers’ hearts aflutter.  I remember passing lines of gamers as I walked into Best Buy last winter, gamers who camped overnight in sleeping bags outside of the store to be the first on the block to have the year’s coolest toy.  This year Sony is a shoe-in for the most-sought-after gadget, and next Thursday you can expect to see the same kind of insanity, I would imagine.

  If you’re a gamer, I suppose the PS3 is worth getting all worked up about.  There are two versions, according to the Sony website.  Both configurations use Blu-Ray Discs, Bluetooth wireless controllers, four USB ports, and a microprocessor called the Cell Broadband Engine, developed exclusively for the PS3, which utilizes eight cores to distribute the processor workload.  (Traditional consoles have used “single-core” processors, which are slower and less efficient.)  However, one version will cost $599 and one will run $499.  The costlier model comes with Memory Stick/SD/CompactFlash slots (similar to the ones found on the front of many computers) and a 60-gigabyte hard drive. The cheaper version comes without the slots and a 20 GB hard drive.  Both models will impress gamers enough to have them digging out those sleeping bags.

  The “Sleeping Bag Effect” is a reasonably new phenomenon.  Remember the Tickle-Me Elmo craze that swept the country during the holiday shopping season of 1996?  Of course you do.  It all started with Rosie O’Donnell showing one off, which ignited a brushfire of demand—demand that (legitimately) far exceeded the supply.  Insanity ensued, and soon the $12 toy was selling for thousands of dollars on the “black market.”  The Cabbage Patch craze of 1986 was similar, but pales in comparison to the Elmo fiasco.

  Now, as Christmas 2006 looms, manufacturers have developed a do-it-yourself equation for the “Sleeping Bag Effect.”  By undersupplying the market during the prime-shopping season, they can generate a higher demand for their product.  As demand rises, the high prices seem less significant, which helps pay for the development of the technology.  The demand-side insanity helps drive press and publicity for the product, and soon everyone knows about the year’s hottest gadget. 

  In the months following Christmas, prices will likely drop as more PS3’s hit the market.  But even that knowledge will do little to curb the “Sleeping Bag Effect.”  No self-respecting gamer will want to wait until April or May to get their hands around their own PS3 controllers.  Ahem, Bluetooth wireless PS3 controllers.

-From Pulse
   November 9, 2006