GOT ONE! RETAIL, EBAY BATTLES FOR PLAYSTATION 3.

Byline: BRAD A. GREENBERG Staff Writer

Adam Smith, the father of supply-and-demand economics, wouldn't be surprised by PlayStation 3's free-market price, but you might: $5,000-plus.

Friday morning, mere hours after stores sold out nationwide, more than 10,000 PS3s were for sale on eBay, with pictures not of the gaming console but of receipts -- to prove the seller actually had the system.

Most sellers made sure to mention shipping was ``FREE'' -- a mere consolation when some auctions were listed with a ``buy-it now'' option of up to $500,000. A few units even sold for more than $10,000, and one guy cashed in for $99,999,999.

Or did he?

Attacked by consumers who couldn't get their hands on one of only about 400,000 PS3s, opportunistic investors, many of whom had camped outside stores for days, watched helplessly as newly created eBay accounts placed fake bids faster than they could control and raced auction prices beyond even the hysteria-fueled price-point.

``You suck,'' eBay user matbuyer84 wrote to a seller who listed the PS3 for $7,968. ``I hope your kids cry because you are selling their Christmas presents you bastard.''

Reminiscent of the Tickle Me Elmo craze 10 years ago and Microsoft's Xbox 360 last year, PS3 anticipation has incited a type of nationwide madness that causes impatient shoppers to pay thousands over retail and violence among those desperate to get their hands on this holiday season's hottest item.

Fighting for one

Even before sales began at 12:01 a.m. Friday, police in Palmdale helped close two Wal-Marts after hopeful PS3 owners became unruly. Later Friday, a man reported being robbed at gunpoint of his PS3 as he stood outside a Palmdale restaurant.

In Woodland Hills and West Covina, officers responded to stores with hundreds of people waiting for far fewer consoles, just to keep things calm. And a man was shot in Connecticut after he refused to give his cash to two armed men trying to rob the PS3 line.

Fueling the craze has been anticipation that the video-game system isn't just a PlayStation upgrade but a new generation of gaming. In addition to high-resolution images and a processor fast enough to support some of the features of PC games, PlayStation 3 has a Blu-ray optical drive for high-definition DVDs and Internet hook-ups.

``It's a whole new way of life, really,'' said Bob Decuzzi, a veteran gamer who has five TVs set up in his New Jersey basement with different gaming systems. He plans to sell his five PS3s and wait for prices to drop in a few months before he purchases one for pleasure.

The fortunate pre-ordered their units weeks ago. Others who didn't want to miss out got in line early this week.

``I sat my butt in front of Sam's Club for 40 hours,'' said Derek Jaeger, a 21-year-old University of Arizona student. ``I had a tent, I had some beer, I had some friends around. It was like a little camping trip.''

Jaeger promptly listed his $599 purchase (plus tax) on eBay and got a winning bid of $5,200 from a Burbank man, who actually paid.

Many sellers weren't so lucky. They blamed eBay for allowing new accounts to enter the bidding.

``Normally, they don't let you go on these big-ticket items when you've just created an account,'' said Decuzzi, who had to relist one of his PS3s after the auction closed with a $3,200 bid from a fake buyer.

And those mock purchases are coming out of the sellers' profits because they're responsible for blocking bad bidders. EBay charges an auction fee regardless of whether the purchase goes through.

``Our ad was getting 300 hits every five seconds and we couldn't even keep up with blocking the fakes,'' said Eric Szytec, who had a fake bidder win the auction for one of the two PS3s his company, Sell it Today on eBay, listed. ``The only one who is making money on this is eBay.''

San Jose-based eBay did not return calls for comment.

A pretty penny

The going legitimate price on eBay was around $2,000, several sellers said -- still more than three times the sticker price.

``There are always a minority of people that are completely price insensitive for any given product. They will pay through the nose without taking into account the cost-benefit,'' said Ely Dahan, assistant professor of marketing at UCLA Anderson School of Management.

``Those people are not the people you want to follow when deciding how much you want to pay for something. Those are the same people who would drive up Internet stock in the year 2000 or paid $10,000 extra for a Toyota Prius.''

The PS3's features won't be outdated soon, but they'll likely face some new competition next fall, just like last Christmas' cherished gift, Microsoft's Xbox 360, is facing now.

``The console wars are not over,'' Dahan said. ``There will always be a bigger, better, faster version coming out.''

brad.greenberg(at)dailynews.com

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CAPTION(S):

2 photos

Photo:

(1 -- color) Thomas Slater, 17, of Woodland Hills got two PlayStation 3 consoles at Best Buy.

Tina Burch/Staff Photographer

(2) An employee removes a sign from the window of a Wal-Mart in Putnam, Conn., on Friday. Two armed robbers shot a man in a line of customers waiting for the PS3 to go on sale.

Jessica Hill/Associated Press