7/01/2007

TRADEME BANS EARLY PS3 SALES

My Herald on Sunday column looks at Trademe's ban of PS3 sales ahed of the official launch date of the machines...

One of the great things about globalisation is that when it comes to buying gadgets, we’re not at the mercy of retailers to the extent that we used to be.

That means you can often buy a gadget online through an overseas merchant before it’s even released in stores here. In many cases, you’ll pay less for it even when shipping and tax is taken into account, such is the mark-up our retailers have traditionally put on electronics.

Buying from overseas vendors is always something you should approach with caution, as the product may not work here as it does in the country it was originally sold in. But that same force of globalisation is driving electronics makers to standardise their products across the world to lower production and sales and marketing costs. The result is that most major new products work the same way worldwide.

The iPod is a good example – it’s the same everywhere you go – only the plug adapter and the language the manual is written in change between territories.

Similar can be said for the video gaming industry’s new big ticket item, the Sony Playstation 3, which goes on sale here in March for $1299. New games for the console are not zoned, a policy Sony kicked off with its PSP handheld device. You can play new games on the PS3 no matter where they were bought, though you may need a TV that’s PAL and NTSC compatible to play titles bought in the US and old PS1 and PS2 games won’t work on PS3 machines bought overseas. Zoning for new high definition Blu-ray discs which the PS3 play is simpler than for DVDs. Instead of sharing region 4 with Australia, we are now in region B with Europe, the Middle East, Africa and Australia. A universal power adapter also allows your PS3 to be plugged into the mains anywhere you are.

With this type of standardisation, it’s no wonder people are more comfortable buying overseas before local launch date. But don’t plan on bringing in a bunch of PS3 consoles to on-sell on Trademe – the country’s largest auction website has banned sales of PS3 before the March launch date.

“Previous experience with release of similar items has resulted in increased fraudulent auctions for them,” Dean Winter, Trademe’s trust and safety manager told me.

“The fraudsters tend to use them because they are both desirable and unavailable meaning less cautious buyers and a quicker alleged sale.”

Trademe prohibits what’s called “drop-shipping” – auctioning a product before you’ve received it or even paid for it.

With the PS3 such a highly anticipated item, there’s a good chance some opportunists might order PS3s from merchants in Asia, then advertise and sell the machines on Trademe at inflated prices before the shipment has even arrived here. That’s pretty dodgy and Trademe is right to protect its customers.

But there’s another group of Trademe users who may have already imported the PS3, can prove they have it in their possession and want to make a profit selling it on to someone who wants it more than them. I see no problem with that. If Trademe is happy to let people sell concert tickets at inflated prices, I can’t see why electronics should be any different. It’s the free market in action.

As Herald reader Mark Rowley asked: “Surely if a person legally purchases a PS3 while overseas and then decides to sell it on return to NZ, how can any person or company, legally prevent them from doing so? There is no illegality or breach of intellectual property right, or copyright involved.”

There are brand new PS3 consoles, which the owners say they will ship worldwide, available on eBay’s US website for US$800 - $US900 plus freight so PS3 fans can still pick up a machine early from eBay and other sources. Auckland Retailer Parallel Imported has also been bringing PS3s in, though when I enquired last week they only had one left – at an obscene $2300.

Winter points out that eBay Europe is also banning PS3 sales before the official launch there, also scheduled for March and says there’s been no pressure exerted by Sony to restrict Trademe PS3 sales.

But with auction sites listing more new goods than ever, a thorny policy issue is likely to emerge here, as more people buy products overseas with the aim of selling the products back home before the official release date. Will the Trademe ban extend to other yet to be released goods? I hope not. If you bought it fair and square and have it in your possession you should be able to auction it. But can you live with yourself extracting huge profits in the process? That’s another question entirely…

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