Sony takes retailers to task over PS3 imports

Retailers ‘deceiving’ consumers over grey market PS3 consoles, Sony warns

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By  Published  December 31, 2006

Sony Gulf has come out fighting against major retailers in the UAE selling unauthorised PlayStation 3 (PS3) consoles prior to the official Middle East launch in March.

In an unprecedented development, retail chains including Virgin Megastore, Sharaf DG, Geant hypermarkets and Jacky’s Electronics, are selling PS3 consoles designed for use in the US and Japan and sourced from unauthorised distribution channels.

The vast majority of retailers are selling 20GB and 60GB consoles for hugely inflated prices – some up to double the recommended retail prices of US$499 and US$599 respectively, as confirmed by Sony Gulf in November. Colin Thomas, marketing manager of Sony Gulf’s PlayStation division, said the company was “incredibly disappointed with the situation and the ongoing actions of these retailers”.

“The PS3s they’re selling are Japanese and US imports, and they are not making consumers aware that the consoles are not fully functional nor are they covered by a Sony warranty,” he said. “There’s a lot of work going on behind the scenes in conjunction with our UAE channel partner Jumbo Electronics to address the situation.

“We’ve made it extremely clear to these retailers that they have a duty to make their customers aware that these are unauthorised products they are selling. However, there seems to be an element of deceit playing out here.”

Thomas said that Sony had been hamstrung by the lack of legal avenues available in its bid to shutdown the trade.

“We have attempted to build a case based on laws bound by the UAE Telecommunications Regulation Authority (TRA), regarding the legality of these unauthorised PS3s being sold in the UAE, but they seem to hold little weight,” he explained. “The TRA seems to be little more than an advisory group on telecommunications issues.”

Thomas said Sony had encountered similar issues in the Middle East prior to the official launch of its PSP portable and PS2 consoles, but not to the same extent.

He also identified Plug-Ins Electronix as stocking PS3 consoles, however the company’s divisional manager, Bradley Bennett, denied this was the case.

“If we were selling PS3s we’d have queues of thousands waiting for them,” he said. “We’re holding to the official launch date in March.”

However, Jacky’s Electronics COO Ashish Panjabi told ECN that the retailer’s decision to stock unauthorised PS3s was merely in response to consumer demand.

“We’re not actively importing, promoting or even showcasing the product in our stores,” he said.

“We are making the product available to customers that specifically approach us and enquire about its availability.

“We are merely meeting consumer demand. If people are determined enough to get their hands on one they will find a way of sourcing it.”

Panjabi also believed that Jacky’s involvement in the trade would not impact its future relationship with Sony.

“We have not had any official communications with Sony yet but we anticipate that [our dealings] will not adversely impact our ability to source official PS3 consoles when they are officially launched in the Middle East,” he said. “We are fully committed to supporting the PS3 for its initial launch in March.”

Other retailers contacted by ECN were either unavailable or were unwilling to comment about the current situation.

Thomas said Sony had distributed more than 15,000 leaflets across the Middle East in a bid to raise consumer awareness about the pitfalls of purchasing an unauthorised PS3 console.

“The great thing is that many consumers are becoming very astute at identifying illegitimate stock. They are wising up to the antics of some traders,” he said. “However, the problem is that when you have major retail chains such as Virgin sourcing product from grey channels, consumers automatically assume that it’s legitimate stock and that’s simply not the case.

“It’s a difficult situation and I’m sure you can imagine what sort of impact this could potentially have our long-term relationships with these retailers.

“When it comes to the official launch of PlayStation 3 in the Middle East, we will bear in mind their involvement in light of the current situation.”

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