SAN JOSE, Calif. – Retailers expect to be overwhelmed by demand during the impending video game console launches, but say they're working to keep the spirit festive while trying to prevent chaos and confusion.
Lines of anxious customers were growing at Best Buy (BBY) and Wal-Mart (WMT) stores across the country Wednesday as major retailers were getting confirmation of how many of Sony Corp.'s (SNE) PlayStation 3 consoles they would be getting for its Friday launch.
Stock of Nintendo Co.'s Wii will not be as constrained, but retailers are also expecting the inaugural batch to sell out quickly after they go on sale Sunday.
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Major retailers refused to widely announce exactly how many units would be distributed to individual locations.
To curb overly high hopes and potential frustrations, many retailers were trying to make it clear that supplies would be limited.
They posted notices in stores and warned on Web sites that PS3 supplies would be tight through the holidays. Store employees are also reiterating the message to customers who are lining up in designated areas outside stores.
Best Buy noted on the front page of its nationwide circular ads on Sunday that it would have a minimum of 20 60-gigabyte PS3 models and six 20-gigabyte models per store on Friday. How much each store would have in stock above that allotment was up for speculation.
Jose Mota, 26, of Hayward isn't worried. He was the first in the line of 33 people who had already camped outside of the Best Buy store in Union City since Tuesday.
The store manager told them to keep the place clean and left the light on for them overnight, he said.
The group — now an ad-hoc community — also is conducting a roll call every four hours to make sure everyone still has their places. People are taking turns to go get food or grab a shower.
Keeping a safe environment for consumers is a top priority, but the process is still a balancing act, said Jill Hamburger, vice president of gaming at Best Buy Co. Inc.
Sony promises 400,000 PS3 machines for the U.S. market on the day of the launch and a U.S. total of about 1 million units by year's end — down sharply from its original projections of 4 million.
Nintendo expects to have 4 million Wiis ready worldwide when the console hits store shelves, with the bulk going to North America.
Sony declined to detail its distribution strategy, but spokesman Dave Karraker said the company is roughly following a normal path but scaling it down proportionately to a retailers' typical share of Sony gaming products.
Sony plans to replenish inventories weekly, using air transport instead of ocean freighters, he said.
Though Sony could not speak for retailers, Karraker hinted that stores holding midnight sales events would likely hold more units in stock.
Best Buy will have midnight openings at 18 stores, including one in West Hollywood complete with celebrities. Target Corp. (TGT) is throwing an all-night party at its Atlantic Terminal store in the New York City borough of Brooklyn so gamers can try out the PS3 and get a chance to win one. The Sony Style Store in Manhattan will celebrate with a midnight opening.
Wal-Mart Stores Inc. will have a midnight opening on Friday and a PlayStation trailer outfitted with video gaming stations through the weekend at its Orlando, Fla., location.
On the eve of the Nintendo Wii launch, Toys R Us Inc. will host a block party at its Times Square store in New York, featuring music, bright lights, a countdown clock and an appearance by Nintendo of America's president, Reggie Fils-Aime.
"We expect our stores across the country to be busy on the launch dates," said Target spokeswoman Paula Thornton-Greear. "Our stores are prepared to manage crowds including a ticket system to ensure those in line first receive a ticket that ensures them a console based on our inventory."
At Wal-Mart stores, only customers in the designated waiting areas armed with tickets toward purchase will be invited into the stores to pick up their consoles.
Toys R Us conducted in-store pre-sales of the PS3 on Oct. 29 during which customers camped overnight to get a limited number of tickets.
The retailer was relieved to recently learn it would be able to deliver on those pre-orders, but no other customers will immediately be able to get any PS3s that day, Kathleen Waugh, a Toys R Us spokeswoman, said Wednesday.
"That word is out there now, and we're making sure people know in advance so they're not waiting outside," Waugh said.
Some GameStop Corp. (GME) customers who snagged pre-orders of a PS3 last month may not be quite as lucky, as the nation's largest specialty game retailer warned earlier this week it would not be able to fulfill all of its pre-orders on launch day.
Others, such as Amazon.com (AMZN), chose not to take any pre-orders of the PS3 to avoid the potential of confusion or disappointment.
Even online auctioneer eBay Inc. (EBAY) — where PS3s with retail prices of $500 and $600 were bidding Wednesday at an average of $1,500 and Wii machines were going for more than double its $250 retail price — is taking precautions. It imposed restrictions, including limiting sales to only established eBay vendors with minimum rating levels.
The days leading up to the console launches haven't been completely glitch-free.
Best Buy inadvertently posted on its Web site last weekend that it was taking pre-orders for the PS3. It was removed within a few hours but not before an undisclosed number of customers swarmed after the erroneous offer.
To Sony's credit, however, it is effectively avoiding a repeat of the public outcry from the shortages of the rival Microsoft (MSFT) Xbox 360 launch last year, said Wedbush Morgan analyst Michael Pachter.
"Sony is managing this well. They are telling us the numbers are very small," Pachter said. "Nobody is thinking they're getting a PS3 for Christmas and those that do get it will be pleasantly surprised."
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