eBay Profits Surge On Holiday Shopping, Including Consoles

Officials from online auction site eBay have released a 24 percent rise in profits during its financial fourth quarter that were, in part, due to high holiday season demand for consoles such as the PlayStation 3 and Wii. The company saw profits jump to $350 million in the fourth quarter ending December 31st, 2006, while revenues rose by 29 percent to $1.72 billion thanks to the new console launches and improved business in international markets such as Germany and the UK. The total value of goods and services sold on eBay auctions rose by 20 percent during the same period to $14.4 billion, compared to a 17 percent rise the previous quarter. According to a Reuters report, the company indicated that consumers unable to find the new consoles in stores gave a significant boost to sales on eBay. However, reports of the availability and price of console on eBay have been mixed, with data released by the company in November indicating that from November 17 through November 24, 14,675 PlayStation 3s were sold for an average selling price of $1,186.39. From November 19 through November 24, 26,708 Wii consoles were moved sold by eBay by sellers for an average price of $412.53. The influence on eBay on the latest two console launches has not been entirely positive though, with multiple unconfirmed reports of customers buying the console in Japan specifically to sell to Westerners on eBay. The problem was reported to be one of the key reasons for the PlayStation 3’s low software to hardware sales ratio of less than 1:1. In further controversy, Sony Computer Entertainment Europe’s attempts to ban all imports of the PlayStation 3 console, which led to the closure of import store Lik-Sang.com, were proceeded by an apparent crackdown from eBay on sellers trying to post auctions for the console before its release in North American and Japan. With both consoles continuing likely to be out of stock for some time time to come, eBay is likely to remain a significant, but largely unmeasured, source of hardware sales for some time.