The PS5 debacle

The disastrous roll-out of the next gen consoles continues unabated. Scalpers still appear to be in the control of most of the inventory. Scalpers have always been an issue when new consoles appear (or even with any hot consumer product, remember the Christmas when Cabbage Patch Kids came out), but the problem is particularly problematic this year due to the pandemic constraining supply, and novel distribution methods (no retail, online only). This has allowed the more sophisticated bots to corner the supply, leading to console prices on the main reselling sites to have reached up to $1,400 USD for the Blu-ray model of the PS5, almost triple the MSRP of the device. Because of the insatiable desire for the PS5, many media outlets have continued to post the restock times for the major consumer distributors, going so far as running alert services to frustrated consumers trying to beat the bots and hopefully clutching onto a golden ticker, er, console.

Fans have taken to social media to vent their unhappiness, one Twitter user (@jaili_wu) writing to Sony stated, “Fans are unhappy since we can’t get even a ps5, which has been out of stock since November and have to wait until February. This is a launch disaster. Not gonna spend more than the retail price to get a ps5 before then, scalpers can keep them.” Even more bluntly was @Kairi, “I fucking hate scalpers. My friends work their asses off to just even try to get one. and that 1300$ price mark is not only a fuck you to me, but to the families that want a PS5. FUCK YOU.  I hope nobody buys it you pieces of,” well you get the rest.

For those of the audience who are unfamiliar with the reselling market, here’s a brief overview, resellers, just a fancy word for scalpers, deploy semi-autonomous bots that check online stores for inventory of the desired good, in this case, PS5. Once they detect inventory, they quickly check that inventory out, and have it shipped to a collection point. Bots can be built with powerful intelligence which allows them to overcome anti-bot technology, such as queues and re-Captcha. Once the scalper has the inventory, they list it on a variety of sites such as eBay, StockX, or even Craigslist. Retailers are slowly responding to the secondary market takers as they impede customer satisfaction, as well as the cause of site crashes when inventory comes back onto their sites. Walmart even released a statement touting “One bot preventative action we implemented just hours before the PlayStation 5 event on Nov. 25 blocked more than 20 million bot attempts within the first 30 minutes alone.” Noted Hideki Yasuda, an analyst at Ace Research Institute, “even if we consider digital download software purchases, the percentage of sold PlayStation 5s actually in use is not that high, meaning the current demand is constrained by profit-taking resellers.”

As with every hot commodity comes the cons. And the roll-out of the PS5 has been no different. There have been reports of consumers opening box expecting a shiny new PS5, but all that is in the box is rocks. eBay even issued a warning to consumers to be careful when bidding on PS5s and Xbox Series X consoles to protect themselves from a fraudulent seller. One particularly clever scam on that had been run on eBay was for the scammer to sell a photo of the console to the bidder. Some of the sellers were quite brazen in their listings. One particular scam post had the title “Brand New Sony PlayStation V5 White 2020 Photo,” and in the item description stated that, “please note this is a picture only, delivery will be sent within 2-3 working days. You will be sent an A4 printout of the ‘PS5’ – this comes with no refunds.” Moon sized balls on this scammer.

A follow-on problem with the resale market is that Sony is getting no additional revenue from PS5 games being sold alongside the consoles. This is particularly important as the console is, like a razor, sold at a loss, with Sony making its real revenue in the healthy bite they take from every game sale. Bloomberg has notes that the usually “attachment” rate has historically been one new game will be sold alongside the console purchase. Based on the Japanese sales data from Famitsu, just under 215K consoles in Japan during the first month of the consoles’ availability, with approximately 65K games sold, leading to an attachment rate of one-third the standard.

Leave a Reply

Your email address will not be published. Required fields are marked *