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A Follow-up: How Much Will Your Xbox Be Worth In 4 Days
game: Xbox 360
posted by: Aaron Stanton
publisher: Microsoft
date posted: 01:13 PM Sat Dec 3rd, 2005
last revision: 01:14 PM Sat Dec 3rd, 2005

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Click to read.Several days ago, we published an article called, \"How Much Will Your Xbox 360 Be Worth in 4 Days?\" The premise behind the article was that after the general retail population of Xbox 360s sold out, eBay became your last chance to acquire an Xbox 360, and they were rapidly selling out.

eBay\'s stock of Xbox 360 units jumped to 28,000 units the day after launch on November 22nd, but proceeded to plummet by an average of 3,000 units a day in the time that followed.

We predicted that if trends continued, eBay would be sold out of Xbox 360 units, or at least reaching a point that the selling price of the Xbox 360 would rise again, by December 1st.

Were we right?

On the early morning of December 3rd, with the snow outside fresh, crisp, and cold, there are approximately 7,600 Xbox 360 listing on eBay. eBay\'s stock dropped from 28,000 units on the 22nd to 13,500 units when we wrote our first article on November 27th. Between November 27th and now, eBay\'s supply of Xbox 360\'s has dropped by nearly 6000 units, or an average of 1,000 units a day.

Evidently, the trend has slowed some.

This was expected; the possibility of eBay actually selling out was never our concern. As the number of available units lowers, the price will rise. As the price goes up, more Xbox 360 owners will be enticed to list their item; someone unwilling to part with their Xbox 360 for $500 might well consider it for $800. Additionally, there are only so many people willing to pay those prices for a console is short supply; eventually everyone willing to put out the cash will be gone, waiting for a better deal.

Combine this with Microsoft\'s plan to replenish the stock within the next few days, and what you have is a leveling off of the marketplace. The number of people buying equals the number of people selling, and the number of available units remains steady.

We haven\'t gotten there yet.

When eBay had 4,000 units available on the day of the 22nd, Xbox 360s were selling for over $2,000 a unit. The quantity of available units is still dropping; at 1,000 units a day, we\'ll be near that point again in less than a week.

According to an article on Next-Gen.biz, eBay has sold over 40,000 Xbox 360\'s since launch. If that number is correct, nearly 10% of all the Xbox 360 units sold at retail have made their way to the online second-hand store.

It\'s possible that eBay is making more money on the 360\'s launch than any other individual company in the industry.

After the initial flurry of listings on launch day, buyers have purchased more Xbox 360s off of eBay than people have been listing them at a ratio of almost 2-to-1.

Assuming that an availability of 4,000 units equates a price tag over $1,000, eBay\'s stock is still marching quite steadily towards a true shortage of systems.

A true shortage, of course, means that you can\'t get a system at all without selling your house, no matter how badly you want one.

However, in the next few days, Microsoft\'s second shipment of Xbox 360s will hit store shelves, and eBay will be flooded with additional listings; our guess is that prices won\'t spike as high as they did during the launch week.

The only time we might see such exaggerated prices again is heading directly into Christmas day, and that\'s depending on a number of factors, such as how well Microsoft is able to stock the unit as Christmas approaches.

Regardless, the process is likely to repeat itself. Microsoft releases stock, eBay listing spikes, then drops. The question is whether or not the number of units available during subsequent hardware releases will be able to satisfy demand. It\'s possible that increased demand just before Christmas will exceed supply at a rate greater than what we\'re currently seeing, in which case prices on eBay will rise again.

Considering that Microsoft\'s second shipments will probably not be as large as at launch, I\'d be surprised if eBay listings exceed 28,000 simultaneous listing again any time soon. More likely, they\'ll spike to a smaller number, and then drop just as rapidly.

We\'ll keep watching to see how well the stock maintains, but if you\'re unable to pick up a unit at retail, expect to pay at least $500 for a unit, very possibly more anytime between now and Christmas. Depending on how Microsoft handles supply, it could possibly be a great deal more.

If you own an Xbox 360 and are looking for a time to sell, you haven\'t necessarily missed the boat, yet. If prices are going to spike again - which they might do if Microsoft fails to maintain a substantial and steady supply of units in the face of crazed holiday shopping - they\'ll do so two weeks before Christmas as people realize it\'s the high prices of eBay or nothing at all.

It\'s possible even a new shipment from Microsoft might not be enough to keep eBay\'s prices near a reasonable level.

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