| If you thought
the Dreamcast prices that we posted on Monday were high, they just got higher. Final
quantities for the initial Dreamcast shipment were dispatched to NCS overnight and they
were a fraction of what we pre-paid and made deposits for. Prices for the units were also
increased drastically due to the ridiculously small number of consoles in the marketplace.
We are obviously not at all happy with the way that this has turned out and wish we could
simply walk away from the whole affair. It is ugly and smacks of rampant, unfettered
gouging on the part of suppliers in Asia. When supplies are so miserable, those with the
pipeline, however limited, can charge anything they want for their stock. To make matters
worse, the second major shipment of DC consoles now appear to be delayed until December
28. Sega's target of 500,000 shipped units by the end of 1998 is unchanged but the new
date is cutting it very close. Small batches of the DC will be filtering into our company
over the next couple of weeks. Prices may remain high but the critical factor is the
supply that Sega can ship to their various channels. Perhaps this is why we never accept
deposits for new import consoles, too many variables in the mix and anything can happen. |
|
| The DC debut has
been one of the most chaotic, frustrating, and disappointing premieres we have ever
witnessed. It was poorly planned, mismanaged, and has given grief to everyone involved. We
spent hours speaking to our main wholesalers in Japan and Asia overnight and the
quantities that even the largest distributor in Japan received were
unbelievable. Simply laughable and embarassingly small quantities that serve no one. Same
story repeated over and over again with prime, second and third tier distributors in Tokyo
and Hong Kong. The good thing out of all this is that it can't get any worse. It's
horrible right at the get-go so the next couple of weeks should be better. Cross your
fingers as we brace for the maelstrom on Monday. |
|
|
| Dreamcast console |
US$650 |
| Dreamcast with one game |
US$715 |
| Dreamcast with two games |
US$775 |
| Dreamcast joypad |
US$35 |
| Dreamcast VMS (white) |
US$30 |
| Dreamcast joystick |
US$70 |
|
|
| When the
situation goes wong, what's a diehard Sega fan to do? As we recommended since the news of
major shortages hit, wait for the second major DC shipment. Prices are stratospheric now
and have hit a tulip-mania level where the greater fool theory applies. In equity trading,
internet stocks are often compared to tulips. In Holland in the 1600s, tulips were traded
like equities because of the perceived notion that they were rare and precious. Futures
contracts were sold on tulips and a market was created just for the trading of bulbs.
Highly sought after Semper Augustus bulbs commanded whopping premiums and some
sold for 3000 Dutch guilders (US$1500). Of course, no one figured then that
tulips were just another commodity and when supplies became more than the market could
bear, prices crashed and fortunes were lost. Internet stocks are in the same boat, there
are a limited number of companies and shares in the market. When Yahoo, Amazon or any of
the net companies split their shares enough, to levels that the market can't bear anymore,
they will also crash. But not yet, they still have impressive runs left in them and demand
remains strong for all things net. Nimble traders can reap huge rewards by both going long
and short via call and put options. NCS Point: DC prices will come down. Wait for the
quantities to hit the market and bid the prices lower. Supply and demand drives any
commodity. |
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Send e-mail to ncs@escape.com |
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