iTWire has some interesting thoughts on what the video game market will be like this holiday season. Like everyone else, they’re predicting a shortage and cite ridiculous prices on ebay for Playstation 3 presales. They mention final prices are going for as high as $2000 - BusinessWeek cites one that went for $3250 + shipping! Right now, the steady bidding seems to price the machines at between $1000-1400. Given the last minute bidding frenzy that seems to come with any eBay auction, it wouldn’t surprise me that they’re going for $2000… $3250 is a bit harder to imagine.

But - is the PS3 really worth $2000? I mean, yeah, I want one, but $2000??? And I thought $599 was high. The BusinessWeek article mentions rave reviews, but 3x the retail price? I’m just not that obsessed.

Anyway, the article makes a good point about Sony and Microsoft vying for the personal entertainment space while Nintendo remains content to just be a console. I think Sony has more at stake than Microsoft, given their latest battery replacement fiasco with Dell notebooks that could cost the company $431M. Add that to the fact that their video game division is reporting $1.71 billion in loses for the PS3. Sony just seems to be bleeding money at this point.

Microsoft’s entertainment division recently posted a $96 million loss despite having sold 6 million Xbox 360s so far and forecasting they’ll sell 10 million by the end of the year.

The PS3 has a long way to go to catch up. They’re planning to have 400,000 by the launch Nov 17, 600,000 on the market by the end of the year and 2 million by March 2007. It remains to be seen if they’ll all sell out. And if they’ll ever turn a profit on the machine.

At least the analysts are predicting it will finally beat Xbox come 2011.