Console Scalping is resulting in low Software sales

BabyTyrant

Est. Contributor
Messages
4,078
Role
  1. Diaper Lover
I knew this would happen, everyone says "Scalping is entirely Normal, there is nothing wrong with it, Sony doesn't care because the consoles are sold"

Well I beg to differ


TLDR: 1 game sold out of every 3 consoles because there's a lot of people refusing to pay the Scalpers Markup, which means less Subscriptions sold, less games sold, less Accessories sold

Those are the true focus on console sales, never the consoles themselves, and Sony is going to screw themselves over if they don't do something to take control of the situation
 

NinjaPizza

Est. Contributor
Messages
284
Role
  1. Diaper Lover
I guess I'll just say I don't think there's been a console manufacturer in history who's ever met early consumer demand, though it's also bad business to overproduce your inventory. Scalpers would, in theory, have fewer customers if you could just walk into any Wal-Mart and buy a PS5. But then, in a weird way, Sony might have fewer customers.
 

BabyTyrant

Est. Contributor
Messages
4,078
Role
  1. Diaper Lover
I guess I'll just say I don't think there's been a console manufacturer in history who's ever met early consumer demand, though it's also bad business to overproduce your inventory. Scalpers would, in theory, have fewer customers if you could just walk into any Wal-Mart and buy a PS5. But then, in a weird way, Sony might have fewer customers.
Early demand? We are 2 months post launch and it's still impossible to buy them without either struggling a lot to get one for retail or paying like $800 from a Scalper

Its so hard strictly because stores don't want to stock them on shelves, which just makes people go crazy
 

NinjaPizza

Est. Contributor
Messages
284
Role
  1. Diaper Lover
Early demand? We are 2 months post launch and it's still impossible to buy them without either struggling a lot to get one for retail or paying like $800 from a Scalper

Its so hard strictly because stores don't want to stock them on shelves, which just makes people go crazy

Really?

I mean, I'm not in the market/searching for a PS5 anyway, but I assumed, as soon as Sony had enough of them, they'd be in department stores ready to go. I wasn't aware stores didn't want to stock them.
 

AEsahaettr

Diapered Oracle
Est. Contributor
Messages
4,761
Role
  1. Adult Baby
  2. Diaper Lover
  3. Carer
  4. Other
I guess I'll just say I don't think there's been a console manufacturer in history who's ever met early consumer demand, though it's also bad business to overproduce your inventory. Scalpers would, in theory, have fewer customers if you could just walk into any Wal-Mart and buy a PS5. But then, in a weird way, Sony might have fewer customers.
I honestly think it's nearly impossible for overproduction so early to be a problem. You're correct that there's (basically) never been a console produced in adequate quantities to satisfy demand at release, but I'll extend that by saying most manufacturers have never even been close. Sure, doubling the number of units available at lease would theoretically depress the price, but how much is subject to a matter of debate given that scalping implies that the numbers of MAP pricing are artificial and not a true reflection of demand anyway.

In any case, it pays to remember that the price of hardware isn't where manufacturers make their money. The real money is in software, and you want to sell consoles as cheaply as possible to increase your share of the console market and the size of the market for your software products.
 

BabyTyrant

Est. Contributor
Messages
4,078
Role
  1. Diaper Lover
Really?

I mean, I'm not in the market/searching for a PS5 anyway, but I assumed, as soon as Sony had enough of them, they'd be in department stores ready to go. I wasn't aware stores didn't want to stock them.
Stores keep them in the back and sell online only, so you end up with 1 of 2 problems

1. Nothing is done to stop scalpers with their Bots and stock is sold out immediately and its impossible to actually finish checkout due to high bot activity and crashing

2. They put anti-bot measures in place that stall the buying process and if you are busy at all, your time to complete checkout might pass you by and then it's sold out again

As far as the stores are concerned, online only is super easy and they are guaranteed to sell out and don't have much of a risk of crazy customers getting into a fight from waiting 4 hours in line to be told there is none left to sell them

Its probably gonna keep going this way until the consoles start to sit around (when resale price is $600 or less; which doesn't leave much room for profit)
 
Last edited:

AEsahaettr

Diapered Oracle
Est. Contributor
Messages
4,761
Role
  1. Adult Baby
  2. Diaper Lover
  3. Carer
  4. Other
As far as the stores are concerned, online only is super easy and they are guaranteed to sell out and don't have much of a risk of crazy customers getting into a fight from waiting 4 hours in line to be told there is none left to sell them

To piggyback on this for the unfamiliar... most retailers with both online and brick & mortar storefronts combine inventory for the two operations. This is why you go to HomeDepot.com, look at a hammer, and it says there are 7 in stock at your local store. With most retail sale goods this isn't a problem.

High-demand products that sell easily online present a challenge of what happens when you have 10 items, put 10 on the shelf, and they start selling online concurrent with people picking them off the shelf. You sell all 10 of your online items in the first 90 minutes, but in that time four people have picked items up off the shelf and took them to a register. Realize that most large retailers have a goal of having an item picked from its shelf location within 1-2 hours of the time a customer places an order. Also realize that the way that inventory management systems work, from the time a unit is purchased at a register, it may be several hours or overnight before the count is changed online.

All things here add up to a system where you a parade of customers who come into the shore go into enraged screaming tirades because they bought the high-demand item online and when they reach the store an hour later, not only is the product not in stock after all but an employee hadn't even gone to pull the item yet, much less discover they don't have the item and call the customer before they come in.

Let's also account for the fact that a new video game console is going to be a major problem for store shrink (lost merchandise). One unit gets shoplifted, that might be enough to account for 2/3 of your local Target's daily allotment for shrink. That's before you account for other items being shoplifted, product being incorrectly logged on the shelf or in receiving, products not being scanned properly at the register, etc. Keeping the products in receiving and letting them sell online eliminates a lot of this and let's face it, the product still sells.

Retailers also have basically no incentive to sell to consumers rather than scalpers. Sony wants every PS5 in the hands of a user, not sitting unused in a scalper's garage. That's not technically a problem for them if scalpers sell all the stock they buy, but I've read a bunch of articles that make it clear this isn't happening. By contrast, the store manager at your local Target doesn't care if the PS5 is purchased by a family or by a scalper. S/he just cares about whether the store moved product at full price and got paid for it.
 
Last edited:

BabyTyrant

Est. Contributor
Messages
4,078
Role
  1. Diaper Lover
To piggyback on this for the unfamiliar... most retailers with both online and brick & mortar storefronts combine inventory for the two operations. This is why you go to HomeDepot.com, look at a hammer, and it says there are 7 in stock at your local store. With most retail sale goods this isn't a problem.

High-demand products that sell easily online present a challenge of what happens when you have 10 items, put 10 on the shelf, and they start selling online concurrent with people picking them off the shelf. You sell all 10 of your online items in the first 90 minutes, but in that time four people have picked items up off the shelf and took them to a register. Realize that most large retailers have a goal of having an item picked from its shelf location within 1-2 hours of the time a customer places an order. Also realize that the way that inventory management systems work it may take several hours from the time a unit is purchased at a register, it may be several hours or overnight before the count is changed online.

All things here add up to a system where you a parade of customers who come into the shore go into enraged screaming tirades because they bought the high-demand item online and when they reach the store an hour later, not only is the product not in stock after all but an employee hadn't even gone to pull the item yet, much less discover they don't have the item and call the customer before they come in.

Let's also account for the fact that a new video game console is going to be a major problem for store shrink (lost merchandise). One unit gets shoplifted, that might be enough to account for 2/3 of your local Target's daily allotment for shrink. That's before you account for other items being shoplifted, product being incorrectly logged on the shelf or in receiving, products not being scanned properly at the register, etc. Keeping the products in receiving and letting them sell online eliminates a lot of this and let's face it, the product still sells.

Retailers also have basically no incentive to sell to consumers rather than scalpers. Sony wants every PS5 in the hands of a user, not sitting unused in a scalper's garage. That's not technically a problem for them if scalpers sell all the stock they buy, but I've read a bunch of articles that make it clear this isn't happening. By contrast, the store manager at your local Target doesn't care if the PS5 is purchased by a family or by a scalper. S/he just cares about whether the store moved product at full price and got paid for it.
Precisely, stores won't care because a sale is a sale

However, Sony does because it hurts their bottom line in the way of fewer Subscriptions, games, and Accessories sold

But so far they seem unable to directly do anything about it that has any meaningful impact
 

AEsahaettr

Diapered Oracle
Est. Contributor
Messages
4,761
Role
  1. Adult Baby
  2. Diaper Lover
  3. Carer
  4. Other
But so far they seem unable to directly do anything about it that has any meaningful impact
In most well-run corporations no failure is treated as a disaster. It's a learning experience. The disaster is when the first occurrence isn't learned from and is repeated. Scalping always happens when new video game consoles are released, but my general understanding is that it's never happened on a scale that significantly affects how many people have taken the item out of a box and hooked it up to a TV. Sony isn't affected by scalping so much as stagnation, and stagnation is new compared to prior releases. A lot of people right now just aren't willing to drop close to a G on an unnecessary luxury purchase in an uncertain job market. Not when a subscription to a new streaming service costs $20/mn or less and can easily fill as many screen-hours in a consumer's home.

For Sony, the situation is what it is and I'm sure the company isn't debating what happened so much as where do we go from here. The real question is how the current situation is learned from and addressed the next time they release a console. That's not great news for consumers but it is what it is.
 
Last edited:

BabyTyrant

Est. Contributor
Messages
4,078
Role
  1. Diaper Lover
In most well-run corporations no failure is treated as a disaster. It's a learning experience. The disaster is when the first occurrence isn't learned from and is repeated. Scalping always happens when new video game consoles are released, but my general understanding is that it's never happened on a scale that significantly affects how many people have taken the item out of a box and hooked it up to a TV. Sony isn't affected by scalping so much as stagnation, and stagnation is new compared to prior releases. A lot of people right now just aren't willing to drop close to a G on an unnecessary luxury purchase in an uncertain job market. Not when a subscription to a new streaming service costs $20/mn or less and can easily fill as many screen-hours in a consumer's home.

For Sony, the situation is what it is and I'm sure the company isn't debating what happened so much as where do we go from here. The real question is how the current situation is learned from and addressed the next time they release a console. That's not great news for consumers but it is what it is.
I can tell you right now if Sony could make way more units, there is no way they would sit around if people could buy them for retail

The problem is worse than ever before because "Scalper Steve" can set up a bot, buy 100 consoles, and sit on them for MONTHS, selling a few consoles every week and when he sells 50 consoles the full 100 is paid for and the other 50 is all gonna be pure profit

It wouldn't be such a big problem if stores actually put them on store shelves, selling Online is what allows "Scalper Steve" to buy 100 when if he had to run around the county buying them in person he might have walked away with 5 consoles and the other 95 would (hopefully) make their way to end consumers that actually want to play the system and buy Subscriptions, Games, and Accessories
 

depends4me

Est. Contributor
Messages
714
Role
  1. Diaper Lover
ogn.jpg

Sorry, BabyTyrant, I couldn't resist. 😆
 

BabyTyrant

Est. Contributor
Messages
4,078
Role
  1. Diaper Lover
View attachment 48484

Sorry, BabyTyrant, I couldn't resist. 😆
You may be laughing, but people have waited outside GameStops because they wanted a PS5, and stores had between 0-2 for Black Friday, so if they weren't one of the 1st 2 in line, they were SOL
 

diapernh

Est. Contributor
Messages
1,036
Role
  1. Adult Baby
Sorry, all i hear is whining that you can’t buy the PS5.
Sony does not care about the scalpers, nor do the retailers, they got their sale. Just like Ticketmaster does not care about scalpers... they got their sale.

If the manufacturers were smart, they would sell the consoles directly to the consumer and leverage the shipping logistics of a company like Amazon to ship them. One point of sale would be easier to control and secure against retail bots. But alas Sony and any other retailer don’t care, they got their money.
 

BabyTyrant

Est. Contributor
Messages
4,078
Role
  1. Diaper Lover
Sorry, all i hear is whining that you can’t buy the PS5.
Sony does not care about the scalpers, nor do the retailers, they got their sale. Just like Ticketmaster does not care about scalpers... they got their sale.

If the manufacturers were smart, they would sell the consoles directly to the consumer and leverage the shipping logistics of a company like Amazon to ship them. One point of sale would be easier to control and secure against retail bots. But alas Sony and any other retailer don’t care, they got their money.
They do occasionally sell on their website, but again that goes back to hitting that you want to buy one and staring at a screen for half an hour if you don't have a life

The bigger problem I suppose is Sony doesn't want to ditch the retailers so they only have 1 point of sale

They already mentioned cutting out all PS4 models except for the regular 500GB black model so they can make more PS5s

And you are missing the point that consoles are sold with the lowest possible markup

So Sony does indeed care because that's not where they really make their profits
 
Last edited:

TheMatrixIsComing

Don't forget the turkeys! They deserve love too!
Est. Contributor
Messages
155
Role
  1. Diaper Lover
  2. Sissy
  3. Little
  4. Other
If I'm correct, console scalping is when you bu multiple new consoles in the intent to make them sell out and then sell them for a higher price? I had no idea what it is so I googled it, is this right?
 

BabyTyrant

Est. Contributor
Messages
4,078
Role
  1. Diaper Lover
If I'm correct, console scalping is when you bu multiple new consoles in the intent to make them sell out and then sell them for a higher price? I had no idea what it is so I googled it, is this right?
Yes, basically in this day and age Scalpers use Bots so they can sit on their ass, buy 100 consoles, make an artificial shortage, and just wait for desperate people to buy them at way above retail

Its done on a huge scale and tons of people are doing it, so there may be an artificial shortage that may last 6+ months like the situation with the Switch
 
Last edited:

TheMatrixIsComing

Don't forget the turkeys! They deserve love too!
Est. Contributor
Messages
155
Role
  1. Diaper Lover
  2. Sissy
  3. Little
  4. Other
Yes, basically in this day and age Scalpers use Bots so they can sit on their ass, buy 100 consoles, make an artificial shortage, and just wait for desperate people to buy them at way above retail

Its done on a huge scale and tons of people are doing it, so there may be an artificial shortage that may last 6+ months like the situation with the Switch
Ok, thanks!
 

BabyTyrant

Est. Contributor
Messages
4,078
Role
  1. Diaper Lover
Ok, thanks!
Its bad specifically because consoles are always sold at a very minimal Markup, Sony isn't really making Profit on Consoles

They make their money by selling you Subscriptions, Games, and Accessories

If they are making $20 profit per PS5 they are doing good

In comparison, if you buy a year of PS Plus, a couple extra controllers, a couple games, and an additional Accessory or Two, they might make $150-$200 profit there

And there was already one developer threatening to delay their games release because they are afraid if they release it they will fail to make the necessary game sales to make a profit

I mean would you release a game with a potential to sell 3M units if you needed to sell 10M units to make enough of a profit to pay all your employees and investors and marketing cost?

I sure wouldn't
 
Last edited:

ShippoFox

Est. Contributor
Messages
3,068
Role
  1. Adult Baby
  2. Diaper Lover
  3. Babyfur
  4. Diaperfur
  5. Little
  6. Other
GPU manufacturers are having major supply problems too. though I haven't decided myself if/when I'm buying a PS5/GPU.
 

BabyTyrant

Est. Contributor
Messages
4,078
Role
  1. Diaper Lover
GPU manufacturers are having major supply problems too. though I haven't decided myself if/when I'm buying a PS5/GPU.
I guess that depends on what (if anything) you already have on PS4 or PC, and what kind of a performance gain you would get for the money spent on a GPU

I had wanted a PS5 because I already have a sizeable PS4 Library, I took a detour and went PC because I wasn't gonna overspend on a PS5
 
Last edited:
Top